Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth State of the Country Handle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nonetheless a big number of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable companies in Kenya.
This signifies that a lot less than 27 p.c of all enterprises in Kenya are registered. Out of these, 92.2 % are micro-enterprises whilst only 7.1 per cent and .7 percent are little and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their organizations is that they worry staying subjected to large taxation that may well stop up having on their income.
On the other hand, as you will shortly discover, there are quite a few positive aspects that await unregistered MSME operators as taxpayers that which includes loans and authorities services.
Bid for governing administration contracts
As a registered little business operator as a taxpayer, you will be placing on your own in the very best posture to bid and win government tenders and trade with the govt and non-govt establishments.
If your enterprise is not registered, you are unable to bid for federal government contracts or even associate with other firms to acquire advantage of communal advantages which includes important networks, particularly with larger organizations with who they could even enter into sub-contracts.
Consequently, you will continually be locked out of beneficial organization associations. Just put, if an enterprise is not a taxpayer it can’t expand!
Personalised tax and customs advisory expert services
These are providers made available by the Kenya Revenue Authority (KRA) through its large network, social media, and telephony between other folks to hell MSMEs operators have an understanding of the tax and customs environment in particular if they intend to get into import and export company.
This is in addition to industry and networking prospects as a result of its taxpayers’ roundtables that the taxman organizes to convey alongside one another corporations for reasons of sharing concerns influencing them and receiving business enterprise tips in line with the core business enterprise of the authority.
It is for the duration of these meetings that the Authority avails alternatives for business people to network and even set up new marketplaces.
Import and export incentives
As a little company operator, your aim is to improve from serving the regional men and women to doing business enterprise globally. No business enterprise operator would their undertaking stay stagnant consequently the want for registration.
MSMEs registered with the taxman stand the possibility of obtaining import incentives that contain decreased import tariffs on inputs these types of as machinery and raw materials to spur production of items for export where the authority features totally free VAT for its members.
The taxman also has a provision for funds allowances on installed machinery and a feasible 20 percent export compensation arrangement.
Quite a few business alternatives
Did you know? In line with the governing administration directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, gals, and men and women with disabilities which are predominantly MSMEs. A different reason why you need to sign-up as a modest company operator.
Unregistered enterprises must sign-up as taxpayers in purchase to open doorways to small business chances that can only be accessed at the time the small business acquires the all-significant PIN number.
