June 20, 2024

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

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

In his Eighth State 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 economic climate nevertheless a large range of them are unlicensed.

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

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

The cause some of the MSME operators give for not registering their companies is that they worry staying subjected to higher taxation that may conclude up having on their earnings.

Having said that, as you will soon explore, there are lots of positive aspects that await unregistered MSME operators as taxpayers that which includes loans and federal government services. 

Bid for government contracts

Bid for govt contracts

As a registered compact company operator as a taxpayer, you will be placing you in the very best posture to bid and gain governing administration tenders and trade with the government and non-governing administration institutions.

If your organization is not registered, you simply cannot bid for federal government contracts or even spouse with other enterprises to just take advantage of communal gains which include essential networks, specifically with much larger firms with who they could even enter into sub-contracts.

Thus, you will repeatedly be locked out of helpful organization associations. Only set, if an enterprise is not a taxpayer it are unable to improve!

Personalized tax and customs advisory services

Individualized tax and customs advisory providers

These are expert services presented by the Kenya Revenue Authority (KRA) by its huge community, social media, and telephony amongst many others to hell MSMEs operators comprehend the tax and customs ecosystem specially if they intend to get into import and export business enterprise.

This is in addition to industry and networking chances by its taxpayers’ roundtables that the taxman organizes to convey with each other organizations for purposes of sharing issues impacting them and getting business enterprise advice in line with the main small business of the authority.

It is during these conferences that the Authority avails prospects for business people to network and even create new markets.

Import and export incentives

Import and export incentives

As a small business operator, your goal is to improve from serving the local men and women to undertaking company globally. No enterprise operator would their enterprise remain stagnant hence the need for registration.

MSMEs registered with the taxman stand the opportunity of getting import incentives that include lowered import tariffs on inputs this kind of as machinery and uncooked elements to spur manufacturing of goods for export where by the authority offers cost-free VAT for its users.

The taxman also has a provision for cash allowances on set up machinery and a attainable 20 per cent export compensation arrangement.

Numerous business opportunities

Numerous organization possibilities

Did you know? In line with the govt directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, women of all ages, and folks with disabilities which are largely MSMEs. Another motive why you require to sign-up as a compact business operator.

Unregistered enterprises need to sign up as taxpayers in order to open doors to company possibilities that can only be accessed as soon as the company acquires the all-crucial PIN amount.

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