In his Eighth State of the Country Deal with on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate however a massive quantity of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed similar enterprises in Kenya.
This indicates that a lot less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises even though only 7.1 p.c and .7 per cent are tiny and medium enterprises respectively.
The motive some of the MSME operators give for not registering their companies is that they worry currently being subjected to higher taxation that may finish up consuming on their revenue.
However, as you will shortly find out, there are quite a few gains that await unregistered MSME operators as taxpayers that which includes loans and govt solutions.
Bid for governing administration contracts
As a registered tiny organization operator as a taxpayer, you will be putting yourself in the best place to bid and earn govt tenders and trade with the governing administration and non-governing administration institutions.
If your enterprise is not registered, you can’t bid for governing administration contracts or even spouse with other businesses to consider advantage of communal advantages which include important networks, primarily with more substantial providers with who they could even enter into sub-contracts.
Therefore, you will continuously be locked out of beneficial organization associations. Merely place, if an organization is not a taxpayer it can’t mature!
Customized tax and customs advisory solutions
These are services made available by the Kenya Earnings Authority (KRA) as a result of its vast community, social media, and telephony between other people to hell MSMEs operators have an understanding of the tax and customs environment specially if they intend to get into import and export small business.
This is in addition to current market and networking opportunities as a result of its taxpayers’ roundtables that the taxman organizes to carry alongside one another firms for applications of sharing concerns affecting them and obtaining small business information in line with the core small business of the authority.
It is through these conferences that the Authority avails prospects for business people to community and even set up new marketplaces.
Import and export incentives
As a compact business enterprise operator, your objective is to mature from serving the nearby persons to carrying out enterprise globally. No business operator would their enterprise continue to be stagnant hence the have to have for registration.
MSMEs registered with the taxman stand the possibility of acquiring import incentives that involve diminished import tariffs on inputs this sort of as equipment and uncooked resources to spur producing of merchandise for export where by the authority features no cost VAT for its associates.
The taxman also has a provision for money allowances on installed equipment and a possible 20 % export payment arrangement.
Various business enterprise alternatives
Did you know? In line with the authorities directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women, and persons with disabilities which are primarily MSMEs. A further purpose why you will need to sign up as a tiny company operator.
Unregistered enterprises really should sign up as taxpayers in purchase to open up doorways to company options that can only be accessed after the enterprise acquires the all-important PIN number.