April 22, 2024

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Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog

In his Eighth State of the Country Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nonetheless a big number of them are unlicensed.

According to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed related organizations in Kenya.

This indicates that a lot less than 27 p.c of all enterprises in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises although only 7.1 percent and .7 percent are smaller and medium enterprises respectively.

The purpose some of the MSME operators give for not registering their businesses is that they dread staying subjected to significant taxation that may perhaps conclusion up ingesting on their revenue.

Having said that, as you will shortly explore, there are a lot of advantages that await unregistered MSME operators as taxpayers that which include loans and federal government solutions. 

Bid for government contracts

Bid for government contracts

As a registered tiny organization operator as a taxpayer, you will be putting oneself in the best posture to bid and gain government tenders and trade with the government and non-govt institutions.

If your business is not registered, you can’t bid for authorities contracts or even associate with other corporations to take gain of communal rewards which includes very important networks, specially with larger companies with who they could even enter into sub-contracts.

Thus, you will constantly be locked out of useful business associations. Basically put, if an business is not a taxpayer it cannot increase!

Personalized tax and customs advisory services

Individualized tax and customs advisory solutions

These are products and services available by the Kenya Revenue Authority (KRA) via its extensive community, social media, and telephony amid other folks to hell MSMEs operators realize the tax and customs natural environment specifically if they intend to get into import and export company.

This is in addition to industry and networking opportunities via its taxpayers’ roundtables that the taxman organizes to deliver with each other organizations for uses of sharing difficulties affecting them and receiving business guidance in line with the main company of the authority.

It is through these meetings that the Authority avails opportunities for business owners to community and even set up new marketplaces.

Import and export incentives

Import and export incentives

As a compact small business operator, your intention is to improve from serving the regional men and women to carrying out company globally. No business operator would their enterprise keep on being stagnant that’s why the need for registration.

MSMEs registered with the taxman stand the chance of receiving import incentives that incorporate lessened import tariffs on inputs these kinds of as machinery and uncooked materials to spur producing of items for export in which the authority presents free of charge VAT for its members.

The taxman also has a provision for capital allowances on set up machinery and a doable 20 per cent export compensation arrangement.

Numerous business opportunities

Quite a few organization possibilities

Did you know? In line with the government directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, ladies, and people with disabilities which are generally MSMEs. Another cause why you have to have to register as a smaller small business operator.

Unregistered enterprises must register as taxpayers in get to open up doorways to business chances that can only be accessed at the time the company acquires the all-significant PIN selection.