Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Condition of the Nation Address on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy but 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 firms in Kenya.
This indicates that significantly less than 27 p.c of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 % and .7 percent are small and medium enterprises respectively.
The motive some of the MSME operators give for not registering their businesses is that they fear remaining subjected to superior taxation that might end up ingesting on their income.
Nevertheless, as you will shortly find out, there are lots of added benefits that await unregistered MSME operators as taxpayers that which includes loans and governing administration solutions.
Bid for govt contracts
As a registered little business enterprise operator as a taxpayer, you will be placing by yourself in the greatest place to bid and earn federal government tenders and trade with the government and non-government establishments.
If your enterprise is not registered, you cannot bid for authorities contracts or even spouse with other corporations to get edge of communal benefits together with critical networks, specifically with bigger companies with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of valuable small business associations. Only put, if an business is not a taxpayer it can not improve!
Customized tax and customs advisory services
These are solutions provided by the Kenya Revenue Authority (KRA) via its large community, social media, and telephony among many others to hell MSMEs operators recognize the tax and customs natural environment particularly if they intend to get into import and export organization.
This is in addition to market and networking alternatives through its taxpayers’ roundtables that the taxman organizes to carry collectively organizations for uses of sharing problems influencing them and getting small business guidance in line with the core business enterprise of the authority.
It is in the course of these meetings that the Authority avails opportunities for business people to network and even set up new marketplaces.
Import and export incentives
As a little organization operator, your aim is to develop from serving the community persons to doing organization globally. No business enterprise operator would their undertaking continue being stagnant hence the require for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that consist of reduced import tariffs on inputs these kinds of as equipment and uncooked supplies to spur producing of merchandise for export exactly where the authority offers cost-free VAT for its members.
The taxman also has a provision for cash allowances on installed equipment and a feasible 20 p.c export compensation arrangement.
Various organization chances
Did you know? In line with the authorities directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, gals, and people today with disabilities which are largely MSMEs. One more explanation why you require to sign-up as a compact business operator.
Unregistered enterprises should really sign up as taxpayers in purchase to open up doors to business opportunities that can only be accessed once the small business acquires the all-significant PIN range.
