Oral East Africa>Banks tap into small business tax compliance At the hut of the story

Written by Oral East Africa

Banks are designing trade accounts for small businesses as Kenya Revenue Authority (KRA) tax crackdown forces traders to separate personal and company cash.

The taxman has increased compliance enrolling small businesses into eTims and deploying 1,400 Revenue Service Assistants (RSAs) to inspect books of small traders and raise tax claims.

Kenya’s small business numbering over 7.4 million are often sole proprietorships with the owners mixing businesses and personal finances.

This leaves records fuzzy for compliance leading to higher claims with the taxman after KRA stepped up door to door visits.

Business Current account

“One of the primary reasons for having a Business Current Account is the clear distinction it creates between personal and business finances. Mixing personal and business transactions can lead to confusion, make accounting challenging, and may even have legal implications,” said Family Bank, one of the lenders at the forefront of this transformation.

It has stepped up marketing it’s Business Current Account, which settle financial obligations conveniently, streamline daily operations, manage transactions, and provide a range of benefits crucial for the growth and stability of businesses.

Small customers adopting a Business Current Account gain access to a range of banking services tailored for businesses including merchant services, business loans, overdraft facilities, and business credit cards.

These services can be crucial for expansion, managing short-term financial needs, or taking advantage of growth opportunities.

Crucial data

*Family Bank chairman Wilfred Kiboro during the Annual High School Commissioning and Send-Off Event of the incoming Form 1 class of 2024 scholarship beneficiaries.*

“With a dedicated Business Current Account from Family Bank, businesses can easily track their expenses. Most banks provide online banking platforms and mobile apps that enable real-time monitoring of transactions. This makes it simpler for businesses to analyze spending patterns, create budgets, and generate financial reports, contributing to better financial planning and decision-making,” Family Bank said.

One of the biggest challenges in financing small and medium enterprises has been the lack of clear concise records of cash flows in and out of the businesses.

As Kenya transitions its small businesses into formal spaces banks will not only get a great opportunity to grow customer base, but also understand the cash flows of SMEs to offer financial support that suits the specific needs of different companies.