November 30, 2022

Y M L P-211

Business – Once You

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 yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nonetheless a substantial amount of them are unlicensed.

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

This indicates that much less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises though only 7.1 p.c and .7 percent are small and medium enterprises respectively.

The reason some of the MSME operators give for not registering their companies is that they anxiety becoming subjected to substantial taxation that might end up ingesting on their financial gain.

On the other hand, as you will quickly uncover, there are numerous added benefits that await unregistered MSME operators as taxpayers that such as loans and govt expert services. 

Bid for government contracts

Bid for government contracts

As a registered small organization operator as a taxpayer, you will be putting your self in the greatest placement to bid and get governing administration tenders and trade with the governing administration and non-governing administration establishments.

If your organization is not registered, you are unable to bid for govt contracts or even spouse with other firms to acquire advantage of communal added benefits which includes vital networks, particularly with more substantial organizations with who they could even enter into sub-contracts.

Hence, you will continually be locked out of practical enterprise associations. Simply just set, if an enterprise is not a taxpayer it are not able to develop!

Personalized tax and customs advisory services

Personalised tax and customs advisory solutions

These are providers supplied by the Kenya Income Authority (KRA) by way of its vast community, social media, and telephony amongst other folks to hell MSMEs operators fully grasp the tax and customs ecosystem specifically if they intend to get into import and export business.

This is in addition to market place and networking possibilities by way of its taxpayers’ roundtables that the taxman organizes to provide together corporations for purposes of sharing challenges influencing them and receiving organization assistance in line with the main business of the authority.

It is during these meetings that the Authority avails chances for business owners to community and even build new markets.

Import and export incentives

Import and export incentives

As a smaller business operator, your goal is to develop from serving the nearby people to undertaking enterprise globally. No organization operator would their enterprise keep on being stagnant as a result the need to have for registration.

MSMEs registered with the taxman stand the opportunity of acquiring import incentives that include reduced import tariffs on inputs these kinds of as equipment and raw resources to spur production of merchandise for export where the authority offers free VAT for its customers.

The taxman also has a provision for cash allowances on put in machinery and a possible 20 per cent export compensation arrangement.

Numerous business opportunities

Various business possibilities

Did you know? In line with the authorities directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, girls, and individuals with disabilities which are predominantly MSMEs. An additional purpose why you have to have to sign up as a small company operator.

Unregistered enterprises ought to register as taxpayers in buy to open up doors to business enterprise options that can only be accessed as soon as the business enterprise acquires the all-significant PIN variety.