Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Condition of the Nation Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy nonetheless a enormous selection of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed equivalent firms in Kenya.
This signifies that considerably less than 27 % of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 p.c and .7 percent are compact and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their corporations is that they concern staying subjected to higher taxation that may finish up consuming on their revenue.
Having said that, as you will soon learn, there are several advantages that await unregistered MSME operators as taxpayers that together with loans and govt solutions.
Bid for federal government contracts
As a registered modest business enterprise operator as a taxpayer, you will be putting yourself in the finest position to bid and win federal government tenders and trade with the government and non-government establishments.
If your small business is not registered, you are not able to bid for government contracts or even partner with other enterprises to acquire gain of communal gains including essential networks, specially with bigger corporations with who they could even enter into sub-contracts.
As a result, you will consistently be locked out of practical company associations. Basically set, if an company is not a taxpayer it cannot mature!
Personalized tax and customs advisory services
These are companies made available by the Kenya Revenue Authority (KRA) via its huge community, social media, and telephony between some others to hell MSMEs operators realize the tax and customs ecosystem especially if they intend to get into import and export business.
This is in addition to market place and networking prospects by means of its taxpayers’ roundtables that the taxman organizes to provide collectively corporations for purposes of sharing challenges affecting them and getting small business tips in line with the core enterprise of the authority.
It is all through these meetings that the Authority avails opportunities for business people to network and even set up new markets.
Import and export incentives
As a little company operator, your objective is to grow from serving the area people to carrying out enterprise globally. No small business operator would their venture continue to be stagnant as a result the need to have for registration.
MSMEs registered with the taxman stand the likelihood of getting import incentives that include reduced import tariffs on inputs such as machinery and uncooked resources to spur manufacturing of items for export where the authority presents cost-free VAT for its associates.
The taxman also has a provision for funds allowances on mounted machinery and a probable 20 % export payment arrangement.
Quite a few small business chances
Did you know? In line with the govt directive on community procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, girls, and folks with disabilities which are primarily MSMEs. An additional purpose why you will need to sign up as a modest business enterprise operator.
Unregistered enterprises must register as taxpayers in purchase to open doorways to business chances that can only be accessed once the small business acquires the all-significant PIN number.
