GOVERNMENT REVENUE AND EXPENDITURE QUESTIONS AND ANSWERS

GOVERNMENT REVENUE AND EXPENDITURE QUESTIONS AND ANSWERS

1. Discuss the functions of the Central Bank of Kenya
   1. The Central Bank regulates the issue of currency that there is adequate stock of notes and coins for circulation. It also withdraws worn – out notes from the public and replaces them with new ones.
   2. It is charged with the responsibility of determining the denominations in which the currency should be issued.
   3. The Central Bank is a banker to the government. It keeps government revenue and pays for the government expenditure.
   4. It acts as the national centre of collection of data and general information in the field of money and banking.
   5. The Central Bank is given powers to inspect books of accounts of commercial banks and other financial institutions and recommend the field in which they may lend money. It also gives informal and formal advice to commercial banks.
   6. Foreign exchange operations – the Central Bank in liaison with the relevant government ministries administer the Country’s foreign reserves. The exchange control act and generally handles the financial relationship between Kenya and foreign financial institutions.
   7. Participates in negotiation for foreign borrowing and in handling of aid and grant funds from foreign Government and international organizations like the World Bank and international monetary fund. The repayment of capital and interests of all loans are also channeled through the bank. viii) Act as a banker to all commercial banks in the country. These banks are required to maintain current account with the central banks, to use for settling claims with one another through the banking clearing house. ix) The bank assists in the development and maintenance of a sound monetary credit and banking system conducive to orderly and balanced economic development of the country.
   8. It regulates credit depending on the policy objectives the government is pursuing at any given period.
   9. The bank promotes exports while ensuring that satisfaction of domestic needs. It ensures that all proceeds of the country’s exports are received without undue delay.
   10. The bank has also initiated studies intended to identify ways and means of maximizing foreign exchange such as coffee and tourism.

1. Identify one type of direct tax through which the government raises its revenue
   1. Export tax ii) Import tax/excise duty iii) Sales tax iv)

 Value Added tax (V.A.T.)

v) Income tax iv) Pay as you earn.

1. Explain why the Kenya Government prepares an annual budget
   1. To enable the government to priorities its needs ii) Help the government to identify sources of revenues iii) Enable Parliament to approve government expenditure. iv) Enable the government to explain the tax structure to the public.

   v) Enable the government to estimate the financial requirements for its needs vi) Acts as reference for future – in correcting mistakes. vii) Smooth running of various government departments viii) Help the government to identify its departments and allocate duties appropriately thus enhancing accountability ix) Give useful information to those organizations and allocate duties appropriately thus enhancing accountability.

   x) Enable the government to account for funds borrowed / donated for development, ix) Accomplish already started projects

1. Identify one main factors that is addressed in the national budget in Kenya
   1. The amount of revenue the government requires and plans to raise ii) Source from which the government intends to raise the revenue iii) How the government intends to spend the revenue

1. How does the Kenya Government ensure that the rule of law is upheld in the country?
   1. Establishing an independent court system to try criminal / civil offends /

   cases, ii) Ensuring that suspected criminals are tried in a court of law and is found guilty are sentenced. iii) Allowing those found guilty to appeal for retrial.

   1. Empowering parliament to control the excess of the executive / president
   2. Entitling every accused person legal representation by an advocate of the

   High Court.

   1. Subjecting all citizens of the country to and are governed by the same law.
   2. Arresting suspects.

1. a) What actions do Police Officers in Kenya take from the time an

   offence is committed up to to the time judgment is passed?

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   i) Arrest the suspected criminal ii) Confine the arrested suspect iii) Provide protection / security to the suspected criminal iv) Investigate the offence to prepare evidence for prosecution

   v) Take the suspected criminal to court vi) Lead the prosecution / give evidence vii) Hand over the criminal to prisons authority viii) Release the suspect if acquainted.

   b) Explain five factors which undermine the work of the police force in

   Kenya.

   1. Inadequate working facilities such as vehicles, radios, stationery to facilitate efficient communication.
   2. Poor conditions of the roads lead to increase / frequent accidents and congestion on the roads thus putting pressure on the police officers, iii) Negative public attitude towards the police makes it difficult for them to perform their duties freely.