CPA NOTES – ADVANCED PUBLIC FINANCE AND TAXATION CONTENT COVERED

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to address advanced public finance and taxation matters in public and private sector entities.

16.0      LEARNING OUTCOMES

A candidate who passes this paper should be able to:

  • Design a tax policy
  • Compute tax for complex aspects of companies and specialised entities
  • Apply tax laws in mitigating tax costs for various tax payers
  • Analyse the taxation issues associated with international transactions
  • Apply advanced public financial management principles in practice

CONTENT

16.1     External resource financing

  • Establishment of External Resource Department in the National Treasury
  • Role played External Resource Department in raising of external finances
  • Book keeping and management of donor funds
  • Regulation of grants administration
  • Monitoring of public projects through clients connections and EPROMIS
  • Development partners and contractual agreements

16.2     Public Investments

  • Establishment of government investment departments
  • Mandate of government investment departments
  • Establishment of State Corporations (State Corporation Act Cap 446)
  • Role of Public Investments Board; KenInvest
  • Other players in public investment

16.3     Public Private Partnerships arrangements

  • PPP models
  • PPP parties, (PPP committee, PPP unit, contracting authority, PPP nodes, transactional advisor)
  • Contract/project agreements, guidelines and standards
  • Composition and role of PPP petition committee
  • Establishment and role of PPP project facilitation fund
  • PPP projects in the country- case study

16.4     Public debt management

  • Establishment of debt management office
  • Objectives of debt management in public sector
  • Sources of public debt in Kenya
  • Debt management strategy paper
  • Relationship between debt management and budget process
  • Debt sustainability analysis
  • Comparative study of debt management strategy in East Africa Community
  • Management of debts county governments and other public entities
  • Role of Cabinet Secretary of the National Treasury in public debt management

16.5 Advanced aspects of the taxation of business income

  • Conversion of partnerships into liability companies, and incorporation of incoming and retiring partners during the year
  • Limited companies, including holding companies, taxation of related parties
  • Charitable institutions
  • Leasing entities
  • Co-operative societies
  • Trade associations and clubs Taxation of extractive industries
  • Banking, insurance, sea and air transport undertakings
  • Unit trusts
  • Real estate investment trusts (REITS)
  • Property developers and contractors
  • Application of relevant case law

16.6    Tax administration and investigations

Investigations and enforcement department

  • Tax fraud
  • Events which may trigger an investigation
  • Tax investigation
  • Back duty and in-depth examinations
  • VAT computation, imported services, VAT withholding agents, restriction on input tax claim submission of VAT documents, VAT documentation refunds, false claims and accountant’s certificate
  • Compensating tax
  • Incorrect and fraudulent returns
  • Customs and excise investigations
  • Negotiation for settlement
  • Tax audit
  • Appellant bodies and appeal procedures
  • Alternative dispute resolution mechanism
  • Application of relevant case law

16.7     Taxation of cross border activities

  • Distinction between trading in and trading with a country; double taxation agreements; theory, design and application
  • Regional perspective with reference to the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA)
  • Most favoured nation status
  • Generalised system of preference and AGOA
  • Withholding tax provisions
  • Tax havens and treaty shopping
  • Tax information exchange agreements OECD
  • Transfer pricing
  • Application of relevant case law

16.8     Tax planning

  • Tax planning for individuals
  • Identifying opportunities to alleviate, mitigate or defer the impact of direct or indirect taxation
  •  Evaluating remuneration packages
  • Tax avoidance and anti-avoidance provisions
  • Uses of tax incentives
  • Disposal of business operations and restructuring of activities
  • SEZA
  • Tax risks

16.9    Tax systems and policies

  • Types of tax systems
  • Role of taxation in economic development
  • Design of a tax policy
  • Criteria for evaluation of a tax system
  • Tax reforms and modernisation of tax systems under various Acts
  • KRA structure – LTO, MTO

16.10  Professional practice in taxation

  • Forms of tax practice and matters relating thereto
  • Matters relating to new clients
  • Handling of client work
  • Disclosures in tax returns, computations and correspondence with the Revenue Authority
  • Moral and ethical issues in taxation
  • Tax agents, appointment, obligations, professional liability
  • Cancellation of tax agents licence
  • Role of tax agents in appeals procedure
  • Tax health check,

16.11    Emerging issues and trends

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