April 1, 2023


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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 Condition of the Nation Tackle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate still a enormous variety of them are unlicensed.

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

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

The purpose some of the MSME operators give for not registering their businesses is that they anxiety becoming subjected to substantial taxation that may close up ingesting on their profit.

However, as you will quickly learn, there are numerous added benefits that await unregistered MSME operators as taxpayers that which includes loans and government providers. 

Bid for government contracts

Bid for government contracts

As a registered little small business operator as a taxpayer, you will be putting you in the very best place to bid and gain governing administration tenders and trade with the govt and non-govt institutions.

If your business is not registered, you can’t bid for govt contracts or even lover with other businesses to just take advantage of communal benefits like vital networks, in particular with larger corporations with who they could even enter into sub-contracts.

Consequently, you will continually be locked out of beneficial enterprise associations. Basically place, if an business is not a taxpayer it cannot expand!

Personalized tax and customs advisory services

Individualized tax and customs advisory services

These are expert services available by the Kenya Earnings Authority (KRA) by means of its broad network, social media, and telephony amongst some others to hell MSMEs operators have an understanding of the tax and customs environment in particular if they intend to get into import and export business.

This is in addition to industry and networking options by its taxpayers’ roundtables that the taxman organizes to provide with each other companies for functions of sharing challenges affecting them and receiving organization assistance in line with the main small business of the authority.

It is throughout these meetings that the Authority avails options for entrepreneurs to network and even build new markets.

Import and export incentives

Import and export incentives

As a modest enterprise operator, your purpose is to improve from serving the nearby individuals to performing business enterprise globally. No enterprise operator would their venture remain stagnant consequently the need to have for registration.

MSMEs registered with the taxman stand the possibility of receiving import incentives that incorporate diminished import tariffs on inputs these types of as equipment and uncooked materials to spur production of merchandise for export where by the authority gives no cost VAT for its customers.

The taxman also has a provision for cash allowances on put in machinery and a achievable 20 p.c export payment arrangement.

Numerous business opportunities

Various enterprise opportunities

Did you know? In line with the government directive on community procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, gals, and people today with disabilities which are predominantly MSMEs. One more motive why you require to register as a small company operator.

Unregistered enterprises must sign up as taxpayers in order to open doors to organization prospects that can only be accessed once the small business acquires the all-important PIN range.

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