Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Point out of the Nation Address on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate nevertheless a substantial amount of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed very similar companies in Kenya.
This means that much less than 27 p.c of all companies in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 percent and .7 percent are small and medium enterprises respectively.
The cause some of the MSME operators give for not registering their businesses is that they concern getting subjected to significant taxation that might end up consuming on their earnings.
Nevertheless, as you will shortly learn, there are several advantages that await unregistered MSME operators as taxpayers that together with financial loans and federal government providers.
Bid for federal government contracts
As a registered compact business operator as a taxpayer, you will be placing by yourself in the very best place to bid and acquire governing administration tenders and trade with the government and non-government institutions.
If your business enterprise is not registered, you can’t bid for federal government contracts or even husband or wife with other corporations to just take advantage of communal added benefits including critical networks, specifically with bigger firms with who they could even enter into sub-contracts.
For that reason, you will repeatedly be locked out of beneficial company associations. Merely put, if an company is not a taxpayer it are not able to develop!
Personalised tax and customs advisory products and services
These are expert services supplied by the Kenya Profits Authority (KRA) through its large community, social media, and telephony among the some others to hell MSMEs operators comprehend the tax and customs natural environment primarily if they intend to get into import and export business enterprise.
This is in addition to market and networking options via its taxpayers’ roundtables that the taxman organizes to deliver collectively corporations for uses of sharing concerns influencing them and receiving company suggestions in line with the core enterprise of the authority.
It is in the course of these conferences that the Authority avails alternatives for entrepreneurs to network and even create new markets.
Import and export incentives
As a little organization operator, your intention is to increase from serving the nearby people today to performing company globally. No organization operator would their venture stay stagnant that’s why the have to have for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that consist of lowered import tariffs on inputs these as machinery and raw materials to spur manufacturing of merchandise for export where by the authority presents free of charge VAT for its customers.
The taxman also has a provision for money allowances on installed machinery and a attainable 20 p.c export compensation arrangement.
Numerous organization alternatives
Did you know? In line with the federal government directive on general public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and folks with disabilities which are generally MSMEs. Yet another purpose why you want to sign-up as a little business operator.
Unregistered enterprises must register as taxpayers in purchase to open up doorways to company possibilities that can only be accessed at the time the enterprise acquires the all-crucial PIN variety.
