KASNEB Public Finance and Taxation - Question 1a

Outline four benefits of an effective tax policy to an economy. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 1b

Discuss four roles played by the Controller of Budget in the budgeting process in your country. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 2a

Distinguish between 'consolidated fund' and 'contingencies fund'. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 2b

Describe six roles of the Commission on Revenue Allocation. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 3a

List four non taxable benefits that an employee might receive from the employer. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 4a

Identify four areas designated as customs areas under the Customs and Excise Act. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 4b

Highlight four qualifying costs for tax purposes under mining business. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 4c

Pesa Ltd., commenced manufacturing on 1 January 2014 after incurring the following capital expenditure: Sh.Factory buildings (note 1)8,000,000Processing ma... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 5a

Propose four benefits that might arise from tax amnesty declared by the revenue authority. ... [Click to view full question and step-by-step solution]

KASNEB Public Finance and Taxation - Question 5b

Summarise six obligations of a registered person for value added tax (VAT) purposes. ... [Click to view full question and step-by-step solution]

November 2015

1a

Introduction to Taxation

Outline four benefits of an effective tax policy to an economy.

1b

Oversight Function in Public Finance Management

Discuss four roles played by the Controller of Budget in the budgeting process in your country.

1c

Introduction to Taxation

One of the challenges facing developing countries is how to finance their budget deficits. This problem is further compounded by the fact that some alternatives of financing the deficit might negatively impact on the country's economy.

Required:

Citing one disadvantage in each case, explain four measures that a government could undertake to finance a budget deficit.

2a

Introduction to Public Financial Management

Distinguish between "consolidated fund" and "contingencies fund".

2b

Relationship between National and County Governments on budget and economic matters

Describe six roles of the Commission on Revenue Allocation.

2c

Procurement in public entities

In the context ofthe Public Procurement and Disposal Legislation:

(i) Outline four recognised methods of disposing stores and equipment.

(ii) Summarise three criteria that a person is required to satisfy in order to qualify for an award of procurement contract.

3a

Taxation of Income

List four non taxable benefits that an employee might receive from the employer.

3b

Administration of Income Tax and Tax Procedures

Suggest four areas that a tax officer should pay attention to in the audit of a pay as you earn (PAYE) system.

3c

Administration of Value Added Tax (VAT)

Jorum Bundi is employed as the manager in charge of human resource at Fanaka Limited. He has provided the following information relating to his income for the year ended 31 December 2014:

Basic salary of Sh.150,000 per month. (Monthly PAYE was Sh.30,000).
He was given an annual clothing allowance of Sh.91.000 for purchase of office attire appropriate for his position. He also earned a management monthly allowance of Sh.2,500 for attending meetings from 1 April 2014 to the end of the year.
The company provided him with a saloon car of 3,000cc. The car had cost the company Sh.2,500,000 in 2012. Depreciation policy on motor vehicles is at the rate of 10% per annum on cost.
He was provided with a company house leased at Sh.25,000 per month. A nominal rent equivalent to 8% of his monthly basic salary was deducted by the company to cater for the rent.
The education fees for his two daughters amounting to Sh.100,000 were paid by the company during the year. This amount was charged to the company's income statement.
Jorum Bundi has a life insurance policy for self and family for which he pays total annual premiums of Sh.150.000.
He is contemplating purchasing a residential house in the near future. During the year, he invested Sh.250,000 in a registered home ownership savings plan from which he earned an interest of Sh.10,000.
He contributed Sh.25,000 per month towards a registered pension scheme.
His private telephone charges averaging Sh.2,500 per month were paid by the company.
He earned interest income of Sh.150,000 during the year from his investments in housing development bonds.
In the month of November 2014, he received a bonus of Sh.75,000 from the employer for good performance.
Jorum Bundi reported a gross income of Sh.900,000 for the year ended 31 December 2014 from his pig rearing farm. This was before deducting the following expenditure:

		Sh.
	Purchase of pig feed	205,000
	Wages to farm labourers	80,000
	Purchase of a plastic water tank	11,000
	Salary for farm manager	150,000
	Farmhouse renovation costs	65,000

Required

(i) Taxable income of Jorum Bundi for the year ended 31 December 2014.

(ii) Tax liability (if any) from the income computed in (c) (i) above.

4a

Customs Taxes and Excise Taxes

Identify four areas designated as customs areas under the Customs and Excise Act.

4b

Taxation of Income

Highlight four qualifying costs for tax purposes under mining business.

4c

Investment Allowances/deductions

Pesa Ltd., commenced manufacturing on 1 January 2014 after incurring the following capital expenditure:

	Sh.
Factory buildings (note 1)	8,000,000
Processing machinery	2,400,000
Saloon car	2,800,000
Neon advertising sign	48,000
Computers	150,000
Delivery van	960,000
Furniture and fittings	200,000
Water tank	90,000
Water pump	40,000
Computer software	120,000
Lorry (3 tonnes)	2,750,000

Additional information:

Factory buildings include; a dwelling house of Sh.1,180,000 and a commercial building comprising an office of Sh.1,200,000, a shop of Sh.800,000 and a showroom of Sh.600,000.
Processing machinery excludes an interest on loan of Sh.240,000 paid for a loan of Sh.2,000,000 used to acquire the machinery, and installation costs amounting to Sh.60,000.
The saloon car was disposed of on 1 December 2014 for Sh.1,800,000.
A staff canteen constructed during the year at a cost of Sh.840,000 was put into use on 1 September 2014.
A section of workers quarters burned down by fire had been renovated at a cost of Sh.1,500,000. The remaining section which was not affected by the fire had been valued by an insurance company at Sh.1,000,000. The workers quarters were reoccupied on 1 October 2014.

Required:

Capital allowances due to Pesa Ltd. for the year ended 31 December 2014.

5a

Administration of Income Tax and Tax Procedures

Propose four benefits that might arise from tax amnesty declared by the revenue authority.

5b

Administration of Value Added Tax (VAT)

Summarise six obligations of a registered person for value added tax (VAT) purposes.

5c

Administration of Value Added Tax (VAT)

The following transactions were extracted from the books of lafo Link Communications Ltd., for the month ended 30 April 2015. The company is registered for VAT.

2 April	Purchased goods from Mambo Enterprises on credit worth Sh 1,800,000.
2 April:	Purchased office fumiture for Sh.720,000 from Excel Furniture Mart.
3 April	Sold goods worth Sh.860,000 to Ken Link Communications Lad on credin
4 April:	Purchased spare parts for motor vehicles worth Sh 230,000.
5 April	Returned office fumiture worth Sh. 180,000 to Excel Fumiture Mart and was issued with a debit note of the same amount
6 April	Goods worth Sh 120,000 were found to be defective and Ken Link Communications Ltd., returned them
9 April	Purchased goods worth Sh 2,400,000 from Japan, exclusive of import duty of 15% and VAT at the rate of 16%
10 April	Sold goods for cash worth Sh. 3,200,000.
12 April	Exported goods wonh Sh. 4,200,000 το Annex Enterprises Ltd., in Rwanda
16 April	Paid catering expenses wonh Sh 160,000.
18 April	Imported goods worth Sh. 1,600,000 from India esclusive of import duty of 25% and VAT at the rate of 16%
20 April	Renovated the existing buildings at a cost of Sh. 800,000
22 April	Paid rent and tates amounting to Sh.490.000
24 April	Exported goods worth Sh. 2,400.000 to South Africa.
28 April	Sold goods worth Sh 980,000 to Vista Communications Ltd. in cash
29 April	Hired a taxi to tramport staff and paid Sh. 9,000
30.April:	Paid the following expenses for the month of April 2015.

30.April:		Sh.
	Water bill	30,000
	Salaries and wages	280,000
	Telephone bill	48,000
	Electricity bill	180,000

The above transactions are stated inclusive of VAT at the rate of 16% where applicable and unless otherwise stated.

Required:

The VAT payable by or refundable to Info Link Communications Ltd., for the month of April 2015.

November 2015

Download Complete Period

Questions

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?

Want to join the discussion?