28/03/2024

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

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

In his Eighth State of the Nation Tackle 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 economic climate however a large number of them are unlicensed.

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

This signifies that much less than 27 p.c of all firms in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 per cent and .7 % are modest and medium enterprises respectively.

The reason some of the MSME operators give for not registering their organizations is that they dread getting subjected to higher taxation that could conclude up consuming on their profit.

Nonetheless, as you will quickly find out, there are many added benefits that await unregistered MSME operators as taxpayers that which includes loans and authorities services. 

Bid for government contracts

Bid for authorities contracts

As a registered compact business enterprise operator as a taxpayer, you will be putting you in the ideal placement to bid and earn federal government tenders and trade with the government and non-government establishments.

If your organization is not registered, you can not bid for governing administration contracts or even partner with other businesses to acquire advantage of communal positive aspects such as critical networks, primarily with larger sized corporations with who they could even enter into sub-contracts.

Thus, you will continuously be locked out of useful business enterprise associations. Simply just put, if an enterprise is not a taxpayer it can not mature!

Personalized tax and customs advisory services

Individualized tax and customs advisory products and services

These are providers available by the Kenya Profits Authority (KRA) by way of its broad network, social media, and telephony among some others to hell MSMEs operators realize the tax and customs natural environment specifically if they intend to get into import and export business.

This is in addition to marketplace and networking possibilities by means of its taxpayers’ roundtables that the taxman organizes to bring jointly firms for purposes of sharing difficulties affecting them and obtaining company advice in line with the core enterprise of the authority.

It is all through these conferences that the Authority avails opportunities for business people to community and even set up new markets.

Import and export incentives

Import and export incentives

As a small small business operator, your goal is to develop from serving the area people to performing business enterprise globally. No organization operator would their undertaking remain stagnant as a result the require for registration.

MSMEs registered with the taxman stand the prospect of obtaining import incentives that contain lessened import tariffs on inputs such as equipment and raw supplies to spur producing of merchandise for export the place the authority gives cost-free VAT for its associates.

The taxman also has a provision for cash allowances on put in machinery and a possible 20 p.c export payment arrangement.

Numerous business opportunities

Many business prospects

Did you know? In line with the govt directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, gals, and men and women with disabilities which are mostly MSMEs. Yet another rationale why you require to sign-up as a smaller business enterprise operator.

Unregistered enterprises should really sign-up as taxpayers in get to open up doors to organization possibilities that can only be accessed once the small business acquires the all-vital PIN amount.