In his Eighth Condition of the Nation Deal with on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state yet a large range of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed related companies in Kenya.
This usually means that fewer than 27 per cent of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 p.c and .7 % are little and medium enterprises respectively.
The reason some of the MSME operators give for not registering their enterprises is that they dread currently being subjected to high taxation that might stop up eating on their earnings.
Nevertheless, as you will shortly find, there are quite a few added benefits that await unregistered MSME operators as taxpayers that such as financial loans and govt companies.
Bid for governing administration contracts
As a registered compact business operator as a taxpayer, you will be placing yourself in the very best situation to bid and earn governing administration tenders and trade with the governing administration and non-govt establishments.
If your business is not registered, you can not bid for federal government contracts or even partner with other corporations to get benefit of communal advantages including crucial networks, primarily with larger sized organizations with who they could even enter into sub-contracts.
Consequently, you will constantly be locked out of handy business associations. Merely place, if an company is not a taxpayer it cannot improve!
Personalised tax and customs advisory services
These are companies supplied by the Kenya Income Authority (KRA) by way of its large network, social media, and telephony between other individuals to hell MSMEs operators fully grasp the tax and customs surroundings especially if they intend to get into import and export company.
This is in addition to market and networking possibilities by way of its taxpayers’ roundtables that the taxman organizes to bring jointly corporations for applications of sharing concerns affecting them and getting organization advice in line with the main small business of the authority.
It is during these conferences that the Authority avails chances for entrepreneurs to network and even establish new markets.
Import and export incentives
As a smaller small business operator, your goal is to develop from serving the area folks to carrying out enterprise globally. No business enterprise operator would their venture stay stagnant that’s why the need for registration.
MSMEs registered with the taxman stand the prospect of getting import incentives that consist of decreased import tariffs on inputs this sort of as machinery and raw supplies to spur producing of merchandise for export the place the authority offers free VAT for its users.
The taxman also has a provision for money allowances on put in equipment and a feasible 20 percent export payment arrangement.
Various organization opportunities
Did you know? In line with the government directive on community procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, gals, and people with disabilities which are primarily MSMEs. An additional purpose why you require to register as a smaller business enterprise operator.
Unregistered enterprises should really sign up as taxpayers in purchase to open up doors to organization chances that can only be accessed when the small business acquires the all-vital PIN amount.