THE UNIVERSITY OF DODOMA COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF ACCOUNTING AND FINANCE COURSE NAME: PUBLIC FINANCE AND TAXATION 1 COURSE CODE: AF 312 COURSE INSTRUCTOR: CPA (T) DAVID MWAKAPALA NATURE OF WORK: INDIVIDUAL ASSIGNMENT DATE OF SUBMISSION: 16TH JANUARY, 2024 S/N NAME REG. PROGRAME SEX NUMBER 1 MARIAM RASHIDI MOHAMED T21-03-01900 BCOM-ACC F QUESTION: Public budget is the road map for every public entity to achieve the desired public goal. Required: 1.Described what does it mean by the public budget. 2. Explain types of public budgets 3. Describe process of public budget 4. What are the possible problems that face public budget in less developed countries (LDC'S). 5. Provide suggestions on how to improve public budget process in Tanzania. PUBLIC BUDGET A Public Budget refers to an annual plan of the government which outlines planned public revenue and expenditure and usually is passed by the highest governmental bodies like parliament, municipal councils and the legislature. The Public Budget functions include; Economic development Environmental protection Education Social protection Security Health EXPLAIN TYPES OF PUBLIC BUDGET There are mainly three types of public budget which are balanced budget, deficits budget and surplus budget; BALANCED BUDGET Refers to total revenue that the government collects in a year is equal to the amount it plans to spend in providing public goods and services and debt interest. As the government is also expected to be prudent and not spend more than its income or revenue. Also, this ensures economic stability and demerits restrict the government from spending on public welfare. DEFICITS BUDGET This is the situation when the estimated government expenditure exceeds the government revenue in a particular year. Thus, there is a shortfall of funds to finance the expenses which needs to be made good by borrowing. The merit of deficit budget is to enables the government to spend on public welfare and the demerits is to increase burden on the government by accumulating debts. SURPLUS BUDGET Refers to the situation which the revenue generated by the government is more than the estimated government expenditure. The surplus budget can be implemented at times of inflation to reduced aggregate demand. Surplus budget is also known as the saving of the government. DISCRIBED PROCESS OF THE PUBLIC BUDGET BUDGET PROCESS refers to the process by which governments create and approve a budget. The budget process comprises stages which feed into one another in a circular process which are Budget formulation (Planning how to spend money) Debating and approval of the budget Budget execution (spending the money) Oversight and control WHAT ARE THE POSSIBLE PROBLEMS OR CHALLENGES FACES PUBLIC BUDGET IN LESS DEVELOPED COUNTRIES’ (LDS’)? The public budget in the LCD’s has been solved but mainly by the solving of the limitation; Political instability It is limitation on public budgeting because most of the poor countries are disheveled in political chaos. This forces them to pamper into excessive expenditures to finance them that is war. However, a number of revenues are lost in the process. Economic variability This can explain as due to economic changes such as price fluctuations and inflations to most of the poor countries leads to random revenue because most of them are the backbones of agriculture sectors, although the increase of price of goods and services has also affected the national budget. High level of tax evasion and avoidance. In this many people in LCD’s have been finding ways not to make profit but to escape the burden of ta and make profit from it. For this the government has been losing revenue and hence the less prediction in the budget. High and unproductive expenditure by the government Here can show as most of the less developing countries basing on spending to the unproductive expenditure such investing on military bases for defense while there is no any return on revenue collections hence leads to difficult on budgeting planning. Corruption. Also is one of borders in public budget due to the fact that most of poor countries have high rates of corruptions among the politicians and some categories of the civil society. This has resulted into loss of revenues which would have otherwise been used to cover the budgetary needs. Debt servicing Poor countries have a heavy debt burden which often take a considerable proportion of their revenues which could have provided for the budgetary necessities. High population growth. The rapid increasing population in less developing countries like Tanzania has led to high government expenditure thus leading to have a less revenue to predict the budget. PROVIDE THE SUGGESTIONS ON HOW TO IMPROVE PUBLIC BUDGET PROCESS IN TANZANIA. The public budget can be solved with in the LCD’s including Tanzania. In the solving the solving the main issue is dealing with the causes of the deficit budget. Fighting against corruptions. Here the government should improve and make follow up so as to curb the problem of corruptions which may lead to improve government revenue. Improving ways of tax collections. That is should the government strictly to ensure that people are paying tax through curbing tax evasion and tax avoidance by improving tax capability so as to increase revenue. Minimizations of debt serving. Through increasing ways of generating source of revenue such as fighting against corruption, and providing tax education to people on the advantages of tax collections to their country. Reduce unnecessary expenditure. Therefore, the government should ensure that they minimize all unnecessary spending so as to maintain government revenue, those unnecessary spending are such like investing in unproductive expenditure such as purchases of military bases and equipment’s. Minimizing high rate of population growth. That through improving gender education and family planning method may reduce an increase number of the people that can help the government spending much to care people rather than investing on projects. References NBAA. (2019). PUBLIC FINANCE AND TAXATION. DAR ES SALAAM : NATIONAL BOARD OF ACCOUNANTS AND AUDITORS.
