Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Condition of the Country Tackle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system nevertheless a enormous number of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed related enterprises in Kenya.
This implies that much less than 27 p.c of all corporations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 per cent and .7 percent are modest and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their companies is that they worry remaining subjected to substantial taxation that may conclusion up consuming on their revenue.
However, as you will before long find, there are many rewards that await unregistered MSME operators as taxpayers that which include loans and governing administration expert services.
Bid for federal government contracts
As a registered small business operator as a taxpayer, you will be placing you in the finest situation to bid and acquire govt tenders and trade with the authorities and non-governing administration institutions.
If your organization is not registered, you cannot bid for govt contracts or even companion with other enterprises to get edge of communal positive aspects which includes crucial networks, specially with bigger corporations with who they could even enter into sub-contracts.
Thus, you will continuously be locked out of beneficial company associations. Only place, if an organization is not a taxpayer it simply cannot develop!
Individualized tax and customs advisory products and services
These are solutions available by the Kenya Earnings Authority (KRA) by its huge community, social media, and telephony among some others to hell MSMEs operators comprehend the tax and customs surroundings especially if they intend to get into import and export business.
This is in addition to current market and networking opportunities through its taxpayers’ roundtables that the taxman organizes to provide together corporations for applications of sharing concerns impacting them and receiving enterprise information in line with the core organization of the authority.
It is all through these conferences that the Authority avails prospects for entrepreneurs to community and even create new markets.
Import and export incentives
As a modest small business operator, your goal is to grow from serving the neighborhood people today to doing small business globally. No small business operator would their enterprise keep on being stagnant for this reason the need for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that contain minimized import tariffs on inputs these as machinery and uncooked materials to spur production of goods for export exactly where the authority offers absolutely free VAT for its customers.
The taxman also has a provision for cash allowances on put in equipment and a possible 20 per cent export compensation arrangement.
Quite a few business options
Did you know? In line with the governing administration directive on general public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, ladies, and people with disabilities which are primarily MSMEs. One more explanation why you need to sign up as a small business operator.
Unregistered enterprises ought to sign-up as taxpayers in purchase to open up doorways to company alternatives that can only be accessed once the organization acquires the all-important PIN number.