December 2, 2022

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

3 min read

In his Eighth Condition of the Country Address on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system still a substantial variety of them are unlicensed.

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

This means that less than 27 p.c of all companies in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 per cent and .7 per cent are tiny and medium enterprises respectively.

The reason some of the MSME operators give for not registering their firms is that they dread becoming subjected to large taxation that may well conclude up consuming on their income.

Nevertheless, as you will shortly explore, there are numerous advantages that await unregistered MSME operators as taxpayers that together with financial loans and governing administration solutions. 

Bid for government contracts

Bid for authorities contracts

As a registered tiny organization operator as a taxpayer, you will be putting yourself in the finest posture to bid and acquire govt tenders and trade with the authorities and non-authorities institutions.

If your enterprise is not registered, you can’t bid for governing administration contracts or even partner with other companies to just take gain of communal rewards such as critical networks, particularly with larger sized providers with who they could even enter into sub-contracts.

For that reason, you will continually be locked out of valuable business associations. Merely set, if an organization is not a taxpayer it can not mature!

Personalized tax and customs advisory services

Personalised tax and customs advisory solutions

These are providers supplied by the Kenya Revenue Authority (KRA) by way of its broad network, social media, and telephony amid many others to hell MSMEs operators realize the tax and customs atmosphere particularly if they intend to get into import and export company.

This is in addition to market and networking prospects by means of its taxpayers’ roundtables that the taxman organizes to provide together businesses for reasons of sharing troubles impacting them and receiving company information in line with the main enterprise of the authority.

It is for the duration of these conferences that the Authority avails alternatives for entrepreneurs to network and even build new markets.

Import and export incentives

Import and export incentives

As a smaller business operator, your target is to grow from serving the local men and women to undertaking small business globally. No company operator would their undertaking keep on being stagnant as a result the require for registration.

MSMEs registered with the taxman stand the opportunity of getting import incentives that include things like lowered import tariffs on inputs this kind of as machinery and uncooked materials to spur manufacturing of items for export exactly where the authority gives free of charge VAT for its associates.

The taxman also has a provision for funds allowances on mounted equipment and a doable 20 percent export compensation arrangement.

Numerous business opportunities

Quite a few small business possibilities

Did you know? In line with the authorities directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and individuals with disabilities which are generally MSMEs. Yet another explanation why you want to register as a tiny enterprise operator.

Unregistered enterprises ought to sign up as taxpayers in purchase to open up doorways to organization chances that can only be accessed at the time the enterprise acquires the all-crucial PIN amount.

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