December 7, 2022

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

In his Eighth Point out 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 financial system yet a large selection of them are unlicensed.

In accordance to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed similar companies in Kenya.

This usually means that a lot less than 27 p.c of all companies in Kenya are registered. Out of these, 92.2 percent are micro-enterprises when only 7.1 % and .7 percent are modest and medium enterprises respectively.

The reason some of the MSME operators give for not registering their firms is that they dread becoming subjected to high taxation that might conclude up taking in on their earnings.

However, as you will before long find, there are quite a few rewards that await unregistered MSME operators as taxpayers that like financial loans and governing administration expert services. 

Bid for government contracts

Bid for federal government contracts

As a registered modest enterprise operator as a taxpayer, you will be putting by yourself in the most effective posture to bid and win federal government tenders and trade with the government and non-governing administration establishments.

If your small business is not registered, you cannot bid for govt contracts or even partner with other enterprises to take gain of communal rewards which include crucial networks, especially with much larger companies with who they could even enter into sub-contracts.

Therefore, you will continually be locked out of handy business associations. Merely put, if an business is not a taxpayer it are unable to grow!

Personalized tax and customs advisory services

Personalised tax and customs advisory solutions

These are solutions presented by the Kenya Profits Authority (KRA) by means of its broad network, social media, and telephony amongst other folks to hell MSMEs operators understand the tax and customs setting especially if they intend to get into import and export business enterprise.

This is in addition to marketplace and networking possibilities by way of its taxpayers’ roundtables that the taxman organizes to carry jointly organizations for uses of sharing issues impacting them and getting company tips in line with the main enterprise of the authority.

It is during these conferences that the Authority avails possibilities for entrepreneurs to network and even create new markets.

Import and export incentives

Import and export incentives

As a small business enterprise operator, your intention is to expand from serving the regional persons to executing company globally. No business operator would their venture remain stagnant as a result the need for registration.

MSMEs registered with the taxman stand the prospect of acquiring import incentives that incorporate diminished import tariffs on inputs this kind of as equipment and raw components to spur producing of products for export in which the authority provides totally free VAT for its associates.

The taxman also has a provision for cash allowances on mounted equipment and a achievable 20 % export compensation arrangement.

Numerous business opportunities

Numerous business enterprise possibilities

Did you know? In line with the authorities directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, women, and people with disabilities which are predominantly MSMEs. An additional cause why you need to sign up as a small small business operator.

Unregistered enterprises really should sign-up as taxpayers in order to open doorways to business enterprise options that can only be accessed after the business enterprise acquires the all-important PIN number.