CIFA Intermediate Level
Public Finance and Taxation for Investment Analysts cheat sheet
Every chapter's key points, formulas and definitions on one page, for the last week before the exam. Each heading links to the chapter that explains it.
Introduction to public financial management
- Public finance is how a government raises, allocates and accounts for the resources it uses to deliver public services, answering to a constitutional and democratic duty to the public rather than to shareholders.
- Government draws on four sources: tax revenue (the largest and most sustainable), non-tax revenue, grants and public debt.
- The PFM Act, 2012 gives practical effect to the Constitution on public finance, aiming at transparent, accountable and prudent management of public resources, effective financial control at both levels of government, and fiscal responsibility.
- The budget process runs in four stages: development plan preparation, Treasury circulars, cash flow projections, then budget estimates and revenue raising measures.
- The National Treasury prepares the national budget, manages national public debt and issues the circulars and regulations that guide both levels; each County Treasury does the equivalent for its county.
Key terms
- Development plan preparation
- Medium-term plans and sector strategies set the policy priorities the budget is subsequently built around.
- Treasury circulars
- Guidance issued by the National Treasury (see The National and County Treasuries, below) to national and county entities setting the budget calendar, format and specific requirements for a given budget cycle.
- Cash flow projections
- Forecasts of expected revenue and expenditure timing through the year, needed for orderly cash and debt management (see the chapter on public debt management), not merely the annual budget total.
- Budget estimates and revenue raising measures
- The detailed expenditure estimates by vote and programme, paired with the specific revenue measures (tax proposals, borrowing plans) needed to finance them, together forming the budget submitted for legislative approval (see the chapter on oversight).
- National Treasury
- Formulates national fiscal policy in coordination with the Central Bank, which conducts monetary policy, prepares the national budget, manages national public debt (see the chapter on public debt management), and issues the Treasury circulars and regulations that guide financial management across national and county government.
- County Treasuries
- Perform the equivalent function at county level: preparing the county budget, managing county public funds (see the chapter on national and county government finances), and ensuring county compliance with national PFM regulations and standards.
The rest of the sheet covers
- National and county government finances
- Oversight in public finance management
- Procurement in public entities
- Public-private partnership arrangements
- Public debt management
- Introduction to taxation
- Taxation of employment and business income
- Taxation of other income and withholding tax
- Investment allowances and deductions
- Administration of income tax and tax procedures
- Administration of value added tax
- Customs and excise taxes
- Miscellaneous fees and levies
- Worked examples
- Exam technique and revision
- Glossary