December 5, 2022

Business Company

Reuters Business

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 Point out of the Country Deal with on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy however a huge variety of them are unlicensed.

In accordance to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable businesses in Kenya.

This suggests that much less than 27 p.c of all corporations in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 per cent and .7 per cent are smaller and medium enterprises respectively.

The cause some of the MSME operators give for not registering their companies is that they worry being subjected to high taxation that may well stop up consuming on their financial gain.

Even so, as you will quickly uncover, there are lots of positive aspects that await unregistered MSME operators as taxpayers that which include loans and federal government products and services. 

Bid for government contracts

Bid for governing administration contracts

As a registered little business operator as a taxpayer, you will be putting your self in the ideal posture to bid and gain federal government tenders and trade with the authorities and non-govt institutions.

If your business is not registered, you can’t bid for govt contracts or even companion with other firms to just take edge of communal added benefits which includes important networks, specifically with more substantial firms with who they could even enter into sub-contracts.

For that reason, you will consistently be locked out of handy enterprise associations. Merely set, if an business is not a taxpayer it can’t improve!

Personalized tax and customs advisory services

Customized tax and customs advisory services

These are products and services offered by the Kenya Profits Authority (KRA) through its broad network, social media, and telephony amid other folks to hell MSMEs operators fully grasp the tax and customs surroundings specifically if they intend to get into import and export business.

This is in addition to sector and networking chances by way of its taxpayers’ roundtables that the taxman organizes to carry together organizations for applications of sharing problems influencing them and obtaining company suggestions in line with the core enterprise of the authority.

It is during these conferences that the Authority avails opportunities for business people to network and even build new marketplaces.

Import and export incentives

Import and export incentives

As a little business enterprise operator, your target is to grow from serving the local people today to accomplishing business globally. No business operator would their undertaking continue being stagnant hence the require for registration.

MSMEs registered with the taxman stand the probability of obtaining import incentives that include reduced import tariffs on inputs this sort of as equipment and uncooked resources to spur producing of goods for export wherever the authority presents absolutely free VAT for its members.

The taxman also has a provision for capital allowances on set up equipment and a probable 20 percent export compensation arrangement.

Numerous business opportunities

Various company alternatives

Did you know? In line with the authorities directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, ladies, and individuals with disabilities which are mostly MSMEs. One more explanation why you need to register as a compact enterprise operator.

Unregistered enterprises really should sign up as taxpayers in purchase to open up doors to company prospects that can only be accessed at the time the business acquires the all-vital PIN selection.