Taxation may be referred to as the revenue raising activity of the government. The government budget is used as an instrument for economic policy, management and accountability. Custom duties were also charged on other exports like ivory, cloves and beads. Public finance has both normative and positive elements, and moving between theory and practice requires attention to help us understand both what policies government should adopt and whether it is likely to do so. It is a study of income and expenditure of central, state and local government and the principles underlying them. Income tax is charged under the income tax Act (Cap 470) which contains rules and regulations relating to the following: S.3 (1) of the income tax act states that: “Subject to, and in accordance with this Act, a tax to be known as income tax shall be charged for each year of income upon all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.”. Meaning of Public Finance. Public Debt 4. 0000005973 00000 n Public finance is that branch of general economics which deals with financial activities of the state or government at national, state and local levels. » (wikipedia) Essentially, what governments do and how to pay for it. Under VAT, it the end user or consumer that ultimately bears the tax burden. A state normally mobilises its revenue from natural resources under its control, collection of taxes from the public, borrowings, establishment or sale and privatisation of state owned corporations. Public Finance is the department of economic theory that deals with public expenditure and VAT was as a result of the perceived deficiencies in the sales tax system which includes: Customs and Excise duties are charged under the custom and excise Act cap 472. Public Finance Notes PDF . Services were not within the scope of tax. Post Views: 1,042. A government budget is a document presenting the government’s proposed revenues, spending and priorities for a financial year. Meaning & Scope of Public Finance . startxref Therefore sales tax had a narrow tax base as compared to VAT, with the result that the revenue yield was comparatively low. Guidance Note on Public Financial Management. PREFACE THIS Introduction to Public Finance is intended to be an elementary text-book. Principles of public finance by Hugh Dalton, 1929, G. Routledge edition, in English - 5th ed., enl., rev., and re-set. The Arabs who entered Kenya in the seventh century for example taxed the coastal region on the basis of Islamic Law. The deductions or allowances are at standard rates for all taxpayers depending on the nature of the capital expenditure incurred. Google+. Hence the substances concerned with these activities become its subject matter. It has been held as a study of principles underlying the spending and raising of funds the public authorities. It contains a simple outline of those ~hings which are necessary to prepare the stu­ dent for independent research; a brief discussion of the leading principles that are generally accepted; a … Public Revenue 2. It encompasses the mechanisms through which public resources are collected, allocated, spent and accounted for. An Evaluation of Major Taxes Nature of Public Finance Public finance has been held as a science which deals with the income and expenditure of the government’s finance. To allow such deductions as may just and reasonable as representing the diminution in value of fixed assets during a particular year. Public Finance 1. Public Finance is the term, which has traditionally been used or applied to the packages of those policy problems, which involve the use of tax and expenditure measures. According to Musgrave, the scope of public finance embraces the following three functions of the government’s budgetary policy confined to the fiscal department the: A budget is an estimate of costs, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals. 0000002491 00000 n Pinterest. These notes are intended for the introductory finance course mathematics-economics program at the University of Copenhagen. 0000002239 00000 n 0000000856 00000 n 718 28 Principles of public finance by Hugh Dalton, unknown edition, This edition doesn't have a description yet. This note covers the following topics: Single-period random cash flows, Stocks, Mean-variance portfolio theory, Utility theory, Capital Asset Pricing Model, Factor models, Multi-period deterministic cash … Public finance is concerned with: − Government expenditures: policy goals − Ressource mobilizations: intergenerational equity … I'm afraid that there is no PFM e-learning for the time being. It has been held as a study of principles underlying the spending and raising of funds the public authorities. 0000002843 00000 n However, in a country where tax evasion is widespread, a single stage tax system will result in a higher loss of revenue than would normally be the case if the system was multi stage. The committee is established to deal with budgetary matters and has responsibility for the following matters, in addition to the functions set out in the Standing Orders—, There is established Committee of the Senate set to deal with budgetary and financial matter’s, it has responsibilities for the following matters, in addition to the functions set out in the Standing Orders present to the Senate, subject to the exceptions in the Constitution, the proposal for the basis of allocating revenue among the Counties and consider any bill dealing with county financial matters; review the County Allocation of Revenue Bill and the Division of Revenue. The main components of public finance include activities related to collecting revenueSales RevenueSales revenue is the income received by a company from its sales of goods or the provision of services. Basic Principles of Public Finance EC 62-817 D IV. 0000003458 00000 n 0000005442 00000 n (c) Provide a basis for entry into the professional examinations Scope Public finance not only includes the income and expenditure of the government but also the sources of income and the way of expenditure of various government corporations, public companies and quasi government ventures. However, the Portuguese were violent and thus this led to a complete failure to use equity in the creation and levy of taxes there were riots (you thought riots started the other day?) 0000002775 00000 n Twitter. They are, 1. Saweel ur Raheem. 0000008075 00000 n Plan of action for achieving quantified objectives. 0000002958 00000 n (adsbygoogle = window.adsbygoogle || []).push({}); Your email address will not be published. Device for coping with foreseeable adverse situations. The tax base was, however, limited to traders only. This “tithe” was to be used in future to assist those who didn’t have enough property to sustain them or even to assist those who were hit calamities. Budget can be divided in to two parts namely, OVERSIGHT FUNCTION IN PUBLIC FINANCE MANAGEMENT. The Act contains provisions relating to: The income tax Act Cap 470 was enacted on 20 December 1973 to replace the former East Africa income tax management Act. Where goods have not been entered for clearance within 21 days, they will be deemed as deposited in a customs warehouse where rent will be charged at the prescribed rates. Nature of Public Finance Public finance has been held as a science which deals with the income and expenditure of the government’s finance. One of the most important administrative tools, a budget serves also as a, A budget process refers to the process which governments create and approve a budget. The budget is passed the legislature, approved the chief executive and presented the national or county treasury to the national or county assemblies. Public and Private finance- principles of Maximum Social Advantage—Public Goods, Private Goods, Mixed Goods and Merit Goods (C oncepts Only) Public finance is a field of economics concerned with how a government raises money, how that money is spent and the effects of these activities on the economy and society. 0000006937 00000 n 0000007562 00000 n I. 0000021076 00000 n Nature of Public Finance Public finance has been held as a science which deals with the income and expenditure of the government’s finance. PUBLIC FINANCE 1. The scope of public finance is not just to study the composition of public revenue and public expenditure. Your email address will not be published. Where goods are not removed from the customs warehouse within the notice period granted customs, they may be sold public auction to recover customs duty and warehouse rent payable on them. Section 16 of the income tax expressly provides that in calculating the gains or profits of a person no deductions can be made for expenditure of a capital nature. Islamic law upholds the right of leaders to tax their subjects within bearable limits and therefore taxation is not forbidden. Description Principles of Public Finance and Taxation. Public finance has been held as a science which deals with the income and expenditure of the government’s finance. 0000003163 00000 n Introduce the Appropriations Bill in the National Assembly. Previous article Numerical Analysis Notes. Next article Atomic Physics Notes Download pdf. Dear Emmanuel, Thank you for your message. Capitation of such tax was done charging a fixed amount for each and every slave that was to be exported from the Sultanate of Oman. Income tax in Kenya is charged under the income tax Cap 470. Lecture Notes # 1. 0000000016 00000 n Where the inputs for manufacturing were subject to sales tax, the imposition of sales tax on the finished product will result in the imposition of tax on another tax i.e. 0000003101 00000 n Book Source: Digital Library of India Item 2015.210757. dc.contributor.author: Dalton Hugh dc.date.accessioned: 2015-07-09T17:01:57Z … 6 PUBLIC FINANCE AND TAXATION GENERAL OBJECTIVE This paper is intended to equip the candidate with … The stabilization aspect of Public Finance is concerned with achieving macro-economic objectives such as: (a) Economic growth and development. 0 Public Services: Cost and Financing EC 62-817C III. 0000020756 00000 n 0000003374 00000 n 0000004968 00000 n Public finance is related to the financing of the state activities and a narrow definition of the public finance would try to say that public finance is a subject which discusses the financial operation of the fiscal or of the public treasury. Download Public Finance and Taxation PDF notes Download Click here to Purchase Public Finance and Taxation notes PAPER NO. The same principle is applied in disallowing capital losses, exhaustion of capital e.g. While being held hostage during negotiations on Vasco da Gamma’s boat, a treaty of surrender was signed with Portugal for an annual tribute of 1,500 meticals of gold. revenue from the public by imposing taxes which revenue is used by the government to provide goods and services to the public or its citizens (to carry out government functions). The subject matter of the public finance is classified under five broad categories of which the first two are discussed. The sales tax system was a single stage system- sales tax was levied only once at the manufacture level. The custom department is charged with the responsibility of controlling imports and exports, enforcing prohibitions and restrictions and collecting revenue on both imports and excisable goods. Thus the scope of public finance extends to the study of independent bodies acting under the government’s direct and indirect … Aggregate financial management. The decision to replace sales tax with. As an emerging economy with a wide gap in the d istribution of public goods, South Africa still needs government to play the three roles mentioned above. The sales tax system had a limited scope – sales tax was levied only on certain specific manufactured Goods. 0000002362 00000 n The farm works deduction is deducted in the income tax computation. A personal identification number (PIN) shall be required for tax purposes for any of the following transactions: VAT is a tax on expenditure that is collected suppliers of goods and services and passed on to the government. 0000007007 00000 n 2 Instrument of public finance: concepts and role of budget; Public revenue: Revenue receipts and capital receipts. The goods should be entered either for home consumption, transit, transshipment, warehousing or to an export processing zone. 3Duffie, D: Dynamic Asset … Topics covered are: Topic 1: Introduction to public financial management Topic 2: Public budget process for public bodies Topic 3: Oversight function in public finance management Topic 4: Introduction to taxation Topic 5: Taxation of income of persons Topic 6: Capital deductions Topic 7: Administration of income tax depreciation of fixed assets. %PDF-1.6 %���� 1991. VAT is charged on each transaction in the production and distribution chain. 3 Taxation and its cannons; Division of tax burden: Expediency theory. KASNEB|KNEC|KISM|ACCA|CAMPUS MAGAZINES AND JOB LINKS, PRINCIPLES OF PUBLIC FINANCE AND TAXATION, TOPIC                                                                                                          PAGE, Introductions to public financial management Legal Framework………………..5, Public budget process for public bodies …………………………………………………38, Oversight function in public finance management………………………….……….71, Introduction to taxation……………………………………………………….…………….80, Taxation of income of persons Taxable and non taxable persons……………..116, Capital deductions……………………………………………………………….…..…………196, Administration of income tax……………………………………………………………240, Administration of value added tax ………………………………………………………….258, Customs taxes and excise taxes………………………………………………………………283, INTRODUCTIONS TO PUBLIC FINANCIAL MANAGEMENT LEGAL FRAMEWORK. WhatsApp. It contains: The finance Act 1992 introduced the thirteenth Schedule to the income tax Act which took effect from 1st January 1993. The word public refers to general people and the word finance means resources.So public finance means resources of the masses,how they are collected and utilized.Thus, Public Finance is the branch of economics that studies the taxing and spending activities of government.The discipline of public finance … ing revenue for public purposes. It is also a set of procedures which the government rations resources and controls spending among the various government agencies. Principles of Finance by Helmut Elsinger. The rst recorded treaty that involved a form of taxation in this period was in 1502. <]>> discuss and review the Budget Policy Statement and budget estimates and make recommendations to the National Assembly; provide general direction on budgetary matters; monitor all budgetary matters falling within the competence of the National Assembly under this Act and report on those matters to the National Assembly; monitor adherence Parliament, the Judiciary and the national government and its entities to the principles of public finance and others set out in the Constitution, and to the fiscal responsibility principles of this Act; review the Division of Revenue Bill presented to Parliament and ensure that it reflects the principles of the Constitution; examine financial statements and other documents submitted to the National Assembly and make recommendations to the National Assembly for improving the management of Kenya’s public finances; make recommendations to the National Assembly on “money Bills”, after taking into account the views of the Cabinet Secretary; and, table in the National Assembly a report containing the views of the Cabinet Secretary. Before 1897, Kenya was made up of multifarious tribal-based societies each with its own geographical and sociological background. xref Save my name, email, and website in this browser for the next time I comment. It has been held as a study of principles underlying the spending and raising of funds by the public authorities. Macroeconomic Aspects of Public Finance. 718 0 obj <> endobj (b) Obtain audit evidence and comply with the regulatory framework during audits. According to H.L Lutz “Public finance deals with the provision,custody and discursement of resources needed … 1 Meaning and scope of Public Finance; Principles of maximum social advantage; Issues related to economic activities of the public sector. It was only upon the influx of foreigners that some form of formal taxation started. Where provisional entry has been allowed, the proper officer will require the owner to deposit an amount estimated as the duty payable. By the end of the rule of the Arabs and Portuguese along the East coast of Africa the existing balance of taxation that was inherited the British included a capitation tax payable per head of slave exported and customs revenue shared equally between the Arabs and Portuguese. %%EOF �mEK.Q�P"Ԁ��$}����������wwf���w�s���� �|,@j%h�KK8��ǩ�j (a) Apply the principles of public finance and taxation in practice. Principles Of Public Finance by Dalton Hugh. It covers a full discussion of the influence of government fiscal operations on the level of overall activity, employment, prices and growth process of the economic system as a whole. These societies were communist/socialist in the sense that property was communally owned all the members of a particular social setup. Introduction to Financial Management: In our present day economy, finance is defined as the provision of money at the time when it is required. 0000003018 00000 n One way lies inflation, and the other lies recession. Required fields are marked *. Can you add oneadd one Upon amassing wealth in form of harvests, part of it was required to be submitted to the community leaders in form of tithe. The investment deduction on buildings and machinery is intended to encourage new investments in the manufacturing sector, The investment deduction is deducted in the income tax computation, or in arriving at the taxable income/loss, Industrial Building allowance: This is a capital deduction or allowance given in respect of capital expenditure on an industrial building, The amount of industrial building allowance is deducted in the income tax computation or in arriving at the taxable income/loss for year or period, Wear and Tear allowance: The wear and tear deduction is a capital deduction on machinery used for business. Where there is insufficient information, the declaration maybe made on provisional status subject to approval the proper officer. The deduction is made against income, Farm works deduction: This is a capital deduction granted only in respect of capital expenditure on agricultural land. Although the entities must contribute, they are not guaranteed a sufficient amount of public goods. Thus on important points, private and public finance differ from each other. It has been held as a study of principles underlying the spending and raising of funds by the public authorities. were punctuated with civil disobedience and widespread cases of tax evasion and avoidance. In a sense, this was a form of taxation because the percentage that was submitted to the community leaders was used to help others in future. Revenue does not necessarily mean cash received., making expenditures to support society, and implementing a financing strategy (such … An aircraft, vehicle or vessel which unloaded must be declared to customs a! Social setup sound, transparent and accountable public financial management is a study of income and of! 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