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

Shira Smolko

In his Eighth Point out of the Nation Handle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy but a large number of them are unlicensed.

According to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related organizations in Kenya.

This means that a lot less than 27 percent of all enterprises in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises even though only 7.1 % and .7 per cent are little and medium enterprises respectively.

The reason some of the MSME operators give for not registering their companies is that they worry becoming subjected to large taxation that may well end up feeding on on their earnings.

Nonetheless, as you will quickly uncover, there are a lot of added benefits that await unregistered MSME operators as taxpayers that such as financial loans and governing administration expert services. 

Bid for government contracts

Bid for govt contracts

As a registered tiny small business operator as a taxpayer, you will be putting your self in the greatest position to bid and win government tenders and trade with the govt and non-governing administration establishments.

If your enterprise is not registered, you cannot bid for government contracts or even spouse with other enterprises to get advantage of communal rewards including crucial networks, specially with larger companies with who they could even enter into sub-contracts.

Therefore, you will constantly be locked out of beneficial company associations. Simply put, if an enterprise is not a taxpayer it are not able to develop!

Personalized tax and customs advisory services

Customized tax and customs advisory companies

These are expert services presented by the Kenya Revenue Authority (KRA) as a result of its vast community, social media, and telephony amongst others to hell MSMEs operators fully grasp the tax and customs atmosphere especially if they intend to get into import and export business enterprise.

This is in addition to market and networking possibilities by its taxpayers’ roundtables that the taxman organizes to convey with each other enterprises for needs of sharing concerns influencing them and receiving organization suggestions in line with the core small business of the authority.

It is for the duration of these meetings that the Authority avails opportunities for business people to community and even establish new markets.

Import and export incentives

Import and export incentives

As a modest business enterprise operator, your objective is to improve from serving the regional people today to performing business globally. No enterprise operator would their undertaking continue to be stagnant consequently the have to have for registration.

MSMEs registered with the taxman stand the possibility of obtaining import incentives that contain lessened import tariffs on inputs this sort of as equipment and uncooked products to spur producing of items for export wherever the authority provides totally free VAT for its associates.

The taxman also has a provision for funds allowances on mounted equipment and a probable 20 per cent export compensation arrangement.

Numerous business opportunities

Many organization options

Did you know? In line with the authorities directive on community procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, ladies, and folks with disabilities which are mainly MSMEs. An additional explanation why you want to sign up as a modest small business operator.

Unregistered enterprises need to sign-up as taxpayers in get to open up doorways to small business prospects that can only be accessed once the organization acquires the all-essential PIN range.

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