In his Eighth Point out of the Country Handle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nevertheless a massive amount of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed equivalent corporations in Kenya.
This suggests that considerably less than 27 % of all corporations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 % and .7 % are modest and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their corporations is that they anxiety currently being subjected to higher taxation that may well finish up ingesting on their income.
Even so, as you will quickly learn, there are numerous rewards that await unregistered MSME operators as taxpayers that like loans and governing administration expert services.
Bid for federal government contracts
As a registered compact organization operator as a taxpayer, you will be placing oneself in the best position to bid and acquire authorities tenders and trade with the government and non-government establishments.
If your small business is not registered, you are unable to bid for government contracts or even companion with other enterprises to just take edge of communal rewards including critical networks, especially with greater companies with who they could even enter into sub-contracts.
As a result, you will continually be locked out of practical organization associations. Basically place, if an business is not a taxpayer it are unable to mature!
Personalized tax and customs advisory products and services
These are expert services supplied by the Kenya Revenue Authority (KRA) through its vast community, social media, and telephony among the other people to hell MSMEs operators realize the tax and customs atmosphere especially if they intend to get into import and export business.
This is in addition to market and networking possibilities through its taxpayers’ roundtables that the taxman organizes to provide collectively organizations for applications of sharing concerns impacting them and receiving business advice in line with the core organization of the authority.
It is during these conferences that the Authority avails opportunities for entrepreneurs to community and even build new markets.
Import and export incentives
As a small organization operator, your target is to improve from serving the regional men and women to executing organization globally. No small business operator would their undertaking remain stagnant consequently the need to have for registration.
MSMEs registered with the taxman stand the likelihood of obtaining import incentives that contain reduced import tariffs on inputs these types of as equipment and raw products to spur producing of items for export in which the authority presents no cost VAT for its customers.
The taxman also has a provision for funds allowances on installed machinery and a doable 20 % export payment arrangement.
Numerous company opportunities
Did you know? In line with the government directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, girls, and persons with disabilities which are mostly MSMEs. A further cause why you have to have to sign up as a tiny business enterprise operator.
Unregistered enterprises should really register as taxpayers in purchase to open doors to business possibilities that can only be accessed the moment the business acquires the all-critical PIN quantity.