Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Point out of the Country Deal with 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 overall economy but a huge quantity of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related companies in Kenya.
This usually means that considerably less than 27 p.c of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 p.c and .7 percent are small and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their enterprises is that they fear being subjected to superior taxation that may well stop up eating on their earnings.
On the other hand, as you will shortly find out, there are a lot of positive aspects that await unregistered MSME operators as taxpayers that which include loans and governing administration expert services.
Bid for govt contracts
As a registered compact enterprise operator as a taxpayer, you will be placing oneself in the very best place to bid and acquire govt tenders and trade with the government and non-govt institutions.
If your enterprise is not registered, you simply cannot bid for governing administration contracts or even associate with other businesses to acquire gain of communal benefits which includes important networks, primarily with greater providers with who they could even enter into sub-contracts.
As a result, you will continually be locked out of helpful business associations. Simply place, if an company is not a taxpayer it cannot improve!
Individualized tax and customs advisory expert services
These are products and services available by the Kenya Profits Authority (KRA) through its wide network, social media, and telephony amongst some others to hell MSMEs operators fully grasp the tax and customs surroundings specially if they intend to get into import and export business.
This is in addition to marketplace and networking alternatives as a result of its taxpayers’ roundtables that the taxman organizes to provide jointly companies for uses of sharing problems affecting them and getting enterprise information in line with the core enterprise 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 marketplaces.
Import and export incentives
As a modest organization operator, your goal is to improve from serving the neighborhood people to performing business globally. No business enterprise operator would their enterprise keep on being stagnant that’s why the need to have for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that include things like lessened import tariffs on inputs this kind of as equipment and uncooked materials to spur producing of products for export wherever the authority gives absolutely free VAT for its members.
The taxman also has a provision for money allowances on set up equipment and a achievable 20 % export compensation arrangement.
Quite a few business enterprise options
Did you know? In line with the authorities directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, females, and folks with disabilities which are predominantly MSMEs. Another purpose why you will need to sign-up as a tiny small business operator.
Unregistered enterprises really should sign up as taxpayers in buy to open doors to small business prospects that can only be accessed once the organization acquires the all-significant PIN quantity.