Benefits Of Registering As A Taxpayer If You’re A Small Business Operator In KenyaKuza Blog
In his Eighth Point out of the Country 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 financial state yet a enormous amount of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed equivalent enterprises in Kenya.
This signifies that considerably less than 27 % of all enterprises in Kenya are registered. Out of these, 92.2 % are micro-enterprises when only 7.1 % and .7 % are tiny and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their companies is that they dread getting subjected to large taxation that could conclude up ingesting on their financial gain.
Nevertheless, as you will quickly learn, there are many benefits that await unregistered MSME operators as taxpayers that together with financial loans and government providers.
Bid for federal government contracts
As a registered smaller company operator as a taxpayer, you will be putting you in the greatest position to bid and win governing administration tenders and trade with the federal government and non-government institutions.
If your business is not registered, you simply cannot bid for governing administration contracts or even spouse with other businesses to acquire gain of communal rewards including critical networks, especially with much larger providers with who they could even enter into sub-contracts.
Hence, you will continually be locked out of beneficial small business associations. Basically put, if an enterprise is not a taxpayer it cannot improve!
Customized tax and customs advisory products and services
These are services available by the Kenya Income Authority (KRA) by way of its broad network, social media, and telephony among other folks to hell MSMEs operators comprehend the tax and customs ecosystem in particular if they intend to get into import and export business.
This is in addition to market and networking options by its taxpayers’ roundtables that the taxman organizes to bring collectively corporations for purposes of sharing troubles influencing them and getting enterprise suggestions in line with the core company of the authority.
It is throughout these conferences that the Authority avails chances for entrepreneurs to community and even set up new marketplaces.
Import and export incentives
As a little business enterprise operator, your aim is to mature from serving the area persons to performing business globally. No business operator would their enterprise keep on being stagnant as a result the need to have for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that involve diminished import tariffs on inputs such as machinery and uncooked components to spur producing of goods for export where by the authority gives absolutely free VAT for its users.
The taxman also has a provision for money allowances on mounted machinery and a attainable 20 p.c export compensation arrangement.
Several small business possibilities
Did you know? In line with the authorities directive on community procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women, and men and women with disabilities which are mainly MSMEs. An additional motive why you have to have to sign up as a small enterprise operator.
Unregistered enterprises ought to sign up as taxpayers in get to open doors to small business possibilities that can only be accessed at the time the enterprise acquires the all-important PIN quantity.