CIFA Intermediate Level
Public Finance and Taxation for Investment Analysts flashcards
Read the question, say the answer to yourself, then turn the card to check. The first 10 of 73 cards are free; the rest come with the subject.
Card 1 of 73
Jump to a card
Complete Flashcard Reference
Review every card in this deck. Open any card to reveal its answer. The first 10 are free; the other 63 come with the subject.
What are the four sources of public finance?
Tax revenue: income tax, VAT, customs and excise, the largest and most sustainable source. Non-tax revenue: fees, licences, fines, and dividends or surpluses from state-owned enterprises. Grants: donor and development partner funding, often earmarked. Public debt: domestic and external borrowing to bridge the gap between revenue and spending needs.
How does the Division of Revenue Bill differ from the County Allocation of Revenue Bill?
Division of Revenue Bill: splits nationally raised revenue between national government and the county governments as a whole. County Allocation of Revenue Bill: then divides the counties' collective share among the 47 individual counties, applying the allocation formula.
How does the Controller of Budget's role differ from the Auditor-General's?
Controller of Budget: authorises withdrawals from the Consolidated Fund, County Revenue Funds and other public funds, a control before money is spent. Auditor-General: audits and reports on how public money was actually used, a check after it has been spent, reported to Parliament and county assemblies.
What is the difference between a direct tax and an indirect tax?
Direct tax: levied on the person who bears its final burden and generally cannot be shifted, for example income tax. Indirect tax: levied on a transaction and typically shifted to another party, usually the final consumer through the price, for example VAT and excise duty.
Under PAYE, who carries the obligation, and what must they do?
The employer, not the employee. Compute the tax on each payment, deduct it, remit it to KRA by the statutory monthly deadline, and file the monthly PAYE return on iTax. Each band's rate applies only to the pay within that band, and personal relief comes off the tax, never off the taxable pay.
Why is a partner's salary added back in computing taxable profit, while a director's salary is deductible?
A partner's salary is an appropriation of profit, not an expense: it is added back before the profit is divided and then allocated to the partner who received it. A director is an employee of a separate legal person, the company, so the director's salary is a deductible expense of the company.
What is withholding tax, and why does the system use it?
The payer of specified income (dividends, interest, royalties, certain professional and management fees, rent to non-residents) deducts tax at source and remits it to KRA before paying the recipient. It moves the compliance burden from many dispersed recipients onto fewer, more easily monitored payers, and for some income it is a final tax with no further filing.
How are accounting depreciation and capital allowances treated in computing taxable profit?
Depreciation is added back in full, because it is not the tax-recognised measure of an asset's cost recovery. Capital allowances, at the rates the Income Tax Act prescribes, are deducted instead, so the tax system controls the timing and amount of cost recovery rather than the company's accounting policy.
What is the key difference between a zero-rated supply and an exempt supply?
Both carry no output tax. Zero-rated: a taxable supply, so the supplier can fully recover the related input tax. Exempt: outside VAT, so the supplier cannot recover the related input tax, and a business making both kinds has its claim restricted proportionally.
What is the route for challenging a tax decision?
1. Objection to the Commissioner within the prescribed period, the first and mandatory step. 2. If unresolved, appeal to the Tax Appeals Tribunal. 3. From there, potentially to the High Court and beyond. A taxpayer cannot go straight to the Tribunal without first objecting.
What does the Public Finance Management Act, 2012 aim to achieve?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the four stages of the budget process, in order?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does the National Treasury's role differ from a County Treasury's?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does the Commission on Revenue Allocation do?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Name the national government public funds and what each is for.
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are a county's main public funds, and where does its revenue come from?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is the role of the Parliamentary Budget Office?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How do the National Assembly's and the Senate's budget roles differ?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What five qualities must public procurement have under the Constitution and the Public Procurement and Asset Disposal Act?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does the PPRA differ from the PPARB?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the stages of the public tendering process, in order?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Why would a government use a Public Private Partnership?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What do the PPP petition committee and the project facilitation fund each do?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the objectives of public debt management?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What trade-off separates domestic debt from external debt?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does expansionary fiscal policy differ from contractionary fiscal policy?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is a tax, and what separates it from a fee?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What decides how much of a tax a seller can shift forward to consumers?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the principles of an optimal tax system?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does tax evasion differ from tax avoidance?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does section 3 of the Income Tax Act do?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
When is an individual resident in Kenya for a year of income, and when is a company?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Where is the line between a taxable and a non-taxable employment benefit?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How are gratuity and compensation for loss of office brought to tax?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How is a company taxed compared with a sole trader or a partnership?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What kind of tax is turnover tax, and what does it not reach?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How is the gain for capital gains tax computed?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What happened to the minimum tax under section 12D, and why?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does a double tax agreement do for withholding tax, and what must happen first?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How has the wear and tear allowance been computed since the Finance Act, 2021?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Which deductions target particular kinds of capital expenditure?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the self, default and advance assessments?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Who is a tax representative, and what are they responsible for?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does KRA recover unpaid tax, and what does the Voluntary Tax Disclosure Program offer?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How is the net VAT for a period worked out, and why does it tax only value added?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
When is input tax deductible against output tax?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is the time of supply, or tax point, and why does it matter?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What triggers customs duty, and what triggers excise duty?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is a bonded warehouse, and what is the bond security for?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is each of these levies charged on, and what is it for: the IDF, the RDL, the catering levy and motor vehicle advance tax?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What pressure replaces shareholder discipline in public finance, and what does public finance cover?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What factors does the formula for sharing revenue among the counties weigh, and why that mix?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does internal audit differ from the Auditor-General's audit?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does the Public Sector Accounting Standards Board do, and why does oversight need it?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does e-procurement change, and what are its benefits?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
In Republic v PPARB ex parte Britam Life Assurance (2018), what did the High Court hold about tenders and the Board's powers?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Why does the PPP Directorate sit within the National Treasury, and what does it provide?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does a PPP project agreement set out, and why is it built on standard national guidelines?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Which Act now governs public-private partnerships in Kenya, and what does it provide for?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How does the Public Debt Management Office's role differ from the Cabinet Secretary for the National Treasury's role on debt?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Why is county borrowing more tightly constrained than national borrowing?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What measures can a government use to reduce public debt?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What two rationales justify granting capital allowances?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Which assets does the wear and tear allowance cover, and what is its counterpart for buildings?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
When must a person register with KRA, what is the PIN used for, and when can it be cancelled?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What does a withholding VAT agent do, and why does the system appoint them?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the steps of the customs procedure, in order?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are the four purposes of customs and excise duties?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Beyond the duty itself, what two controls does excise administration rely on?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is an export levy for, and how does its direction differ from an import-protecting customs duty?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What is stamp duty charged on, and what kind of tax is it?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
What are betting, lottery and gaming taxes charged on, and what two purposes do they serve?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
Why is advance tax collected from commercial vehicle owners rather than relying on self-assessment?
This answer comes with Public Finance and Taxation for Investment Analysts. Buy the subject
How to revise with these cards
- Answer out loud or on paper before you turn the card: recalling is what fixes it.
- Go through the deck in short sessions of ten to fifteen minutes, every day.
- Shuffle once you know the order, so you are not answering from memory of the sequence.
- When a card catches you out, read the chapter it links to, then try the topic in a past paper.