In his Eighth Point out of the Country Deal with on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system nevertheless a big number of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable businesses in Kenya.
This indicates that fewer than 27 per cent of all companies in Kenya are registered. Out of these, 92.2 % are micro-enterprises whilst only 7.1 p.c and .7 percent are tiny and medium enterprises respectively.
The reason some of the MSME operators give for not registering their enterprises is that they concern becoming subjected to superior taxation that could stop up taking in on their financial gain.
However, as you will quickly discover, there are a lot of positive aspects that await unregistered MSME operators as taxpayers that including loans and governing administration services.
Bid for authorities contracts
As a registered small small business operator as a taxpayer, you will be placing your self in the most effective placement to bid and win government tenders and trade with the govt and non-authorities establishments.
If your business enterprise is not registered, you are not able to bid for governing administration contracts or even spouse with other businesses to just take advantage of communal positive aspects like critical networks, especially with more substantial corporations with who they could even enter into sub-contracts.
Hence, you will continually be locked out of beneficial organization associations. Basically put, if an organization is not a taxpayer it can not mature!
Individualized tax and customs advisory expert services
These are expert services supplied by the Kenya Profits Authority (KRA) by means of its huge network, social media, and telephony between other people to hell MSMEs operators understand the tax and customs natural environment especially if they intend to get into import and export organization.
This is in addition to marketplace and networking opportunities as a result of its taxpayers’ roundtables that the taxman organizes to convey together companies for applications of sharing concerns influencing them and acquiring company information in line with the main company of the authority.
It is during these meetings that the Authority avails prospects for business owners to network and even establish new markets.
Import and export incentives
As a little enterprise operator, your intention is to mature from serving the local people to executing company globally. No company operator would their undertaking stay stagnant that’s why the require for registration.
MSMEs registered with the taxman stand the likelihood of obtaining import incentives that include lowered import tariffs on inputs these types of as machinery and uncooked supplies to spur production of products for export where by the authority gives free VAT for its members.
The taxman also has a provision for funds allowances on put in equipment and a achievable 20 per cent export payment arrangement.
Quite a few company options
Did you know? In line with the government directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, females, and people today with disabilities which are largely MSMEs. Another rationale why you require to register as a little enterprise operator.
Unregistered enterprises should really sign-up as taxpayers in get to open doors to business alternatives that can only be accessed as soon as the enterprise acquires the all-essential PIN quantity.