Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Condition of the Country Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system yet a substantial selection of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed similar companies in Kenya.
This implies that fewer than 27 % of all businesses in Kenya are registered. Out of these, 92.2 percent are micro-enterprises even though only 7.1 p.c and .7 p.c are small and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their corporations is that they anxiety staying subjected to significant taxation that could finish up eating on their financial gain.
Having said that, as you will quickly find out, there are quite a few advantages that await unregistered MSME operators as taxpayers that together with loans and federal government companies.
Bid for govt contracts
As a registered smaller enterprise operator as a taxpayer, you will be putting by yourself in the best position to bid and get governing administration tenders and trade with the federal government and non-government establishments.
If your organization is not registered, you can’t bid for federal government contracts or even associate with other businesses to get advantage of communal rewards together with important networks, primarily with bigger corporations with who they could even enter into sub-contracts.
Thus, you will continually be locked out of valuable enterprise associations. Simply just place, if an enterprise is not a taxpayer it can not improve!
Individualized tax and customs advisory providers
These are companies offered by the Kenya Income Authority (KRA) via its vast network, social media, and telephony among the other folks to hell MSMEs operators recognize the tax and customs surroundings especially if they intend to get into import and export business enterprise.
This is in addition to industry and networking prospects as a result of its taxpayers’ roundtables that the taxman organizes to bring together businesses for uses of sharing difficulties affecting them and acquiring business enterprise guidance in line with the main enterprise of the authority.
It is in the course of these meetings that the Authority avails alternatives for business owners to network and even build new markets.
Import and export incentives
As a tiny small business operator, your objective is to expand from serving the area individuals to doing small business globally. No company operator would their venture keep on being stagnant for this reason the will need for registration.
MSMEs registered with the taxman stand the opportunity of receiving import incentives that consist of diminished import tariffs on inputs these types of as equipment and raw elements to spur manufacturing of items for export the place the authority offers absolutely free VAT for its customers.
The taxman also has a provision for cash allowances on installed equipment and a attainable 20 % export compensation arrangement.
Many company options
Did you know? In line with the government directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, women, and people with disabilities which are mainly MSMEs. A further purpose why you will need to sign up as a smaller company operator.
Unregistered enterprises should sign up as taxpayers in buy to open up doors to company options that can only be accessed as soon as the organization acquires the all-significant PIN quantity.
