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Budgeting is the setting of expenditure levels for each of an organization’s functions. It is the estimation and
allocation of available capital used to achieve the designated targets of a firm.
A budget is a statement which consists of the revenue and expenditure estimates of the government for
one particular year. It is an important instrument that every government uses to define the direction of its
national policy, the cost implications of government programmes, and the possible sources of revenues
during a fiscal year.
The budget strives to ensure economic stabilization, social order and harmony, as well as acting as a
measure of government performance and accountability.
A budget process refers to the process by which governments create and approve a budget.
Budgeting Cycle
Budgetary Policies are measures designed to achieve specifically defined budgetary objectives and as such
a budget is a major measure by which the government is able to regulate the economy towards the desired
direction.
Fiscal Policies can be defined as those policies according to which the government uses money and other
revenue programs to achieve economic objectives and reduce undesirable effects on the economy, on
national income, production and employment.
These policies are also concerned with determining the type, timing and procedure that shall be followed in
making government expenditure programs, revenue programs, tax programs, debt management policies etc
to bring about economic development.
Fiscal policies are not universal worldwide since countries are not the same i.e. fiscal policies of a
developed country are different from that of a developing country and those of a least developed country.
A developing country must aim at raising rates of savings and diversion of resources to productive
investments. Any good tax policy must therefore mobilize economic surpluses i.e. the excess of current
output over essential consumption for the purpose of accelerating savings.
Responsibilities of the National and County Treasury in Relation to Budget Preparation
- Enacting the appropriation Bill and any other Bills required to implement the National government's
budgetary proposals including Division of Revenue Bill and County Allocation of Revenue Bill
- Implementing the approved budget
- Evaluating and accounting for, the national government's budgeted revenues and expenditures and
- Reviewing and reporting on those budgeted revenues and expenditures every three months.
NB: The CS shall ensure public participation in the Budget process.
In terms of revenue collection and other support functions, the Authority is divided into the following
departments:
A Board of Directors, consisting of both public and private sector experts, makes policy decisions to be
implemented by KRA Management. The Chairman of the Board is appointed by the President of the
Republic of Kenya. CEO is the Commissioner General.