In his Eighth Condition of the Country Tackle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate still a huge number of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed related enterprises in Kenya.
This suggests that less than 27 % of all companies in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 per cent and .7 per cent are modest and medium enterprises respectively.
The cause some of the MSME operators give for not registering their firms is that they worry remaining subjected to superior taxation that may possibly stop up eating on their profit.
On the other hand, as you will before long learn, there are numerous added benefits that await unregistered MSME operators as taxpayers that which include loans and federal government products and services.
Bid for government contracts
As a registered modest business operator as a taxpayer, you will be placing yourself in the ideal position to bid and gain government tenders and trade with the government and non-govt institutions.
If your enterprise is not registered, you can’t bid for governing administration contracts or even companion with other enterprises to consider benefit of communal rewards which include vital networks, in particular with greater businesses with who they could even enter into sub-contracts.
As a result, you will continually be locked out of valuable enterprise associations. Simply place, if an company is not a taxpayer it simply cannot expand!
Personalised tax and customs advisory companies
These are products and services available by the Kenya Profits Authority (KRA) via its broad community, social media, and telephony amongst other folks to hell MSMEs operators comprehend the tax and customs ecosystem specially if they intend to get into import and export organization.
This is in addition to market place and networking options by its taxpayers’ roundtables that the taxman organizes to convey with each other organizations for applications of sharing issues influencing them and getting enterprise information in line with the core business of the authority.
It is all through these meetings that the Authority avails possibilities for entrepreneurs to network and even create new marketplaces.
Import and export incentives
As a small small business operator, your objective is to grow from serving the neighborhood individuals to accomplishing organization globally. No organization operator would their undertaking continue being stagnant that’s why the require for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that consist of lowered import tariffs on inputs this sort of as machinery and uncooked products to spur production of goods for export in which the authority presents free VAT for its users.
The taxman also has a provision for funds allowances on mounted equipment and a probable 20 percent export payment arrangement.
A lot of organization alternatives
Did you know? In line with the authorities directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, women of all ages, and men and women with disabilities which are largely MSMEs. An additional motive why you require to sign up as a modest business enterprise operator.
Unregistered enterprises should really sign up as taxpayers in order to open doors to business enterprise options that can only be accessed after the enterprise acquires the all-significant PIN quantity.