In his Eighth State of the Country Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system still a enormous selection of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed equivalent corporations in Kenya.
This means that much less than 27 % of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 percent and .7 per cent are modest and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their firms is that they panic getting subjected to significant taxation that might finish up ingesting on their gain.
However, as you will soon discover, there are lots of advantages that await unregistered MSME operators as taxpayers that together with loans and government products and services.
Bid for authorities contracts
As a registered compact company operator as a taxpayer, you will be placing on your own in the ideal posture to bid and earn federal government tenders and trade with the government and non-governing administration establishments.
If your business enterprise is not registered, you cannot bid for government contracts or even companion with other enterprises to just take benefit of communal benefits including very important networks, primarily with larger corporations with who they could even enter into sub-contracts.
As a result, you will repeatedly be locked out of handy organization associations. Basically place, if an company is not a taxpayer it are unable to develop!
Customized tax and customs advisory products and services
These are companies offered by the Kenya Earnings Authority (KRA) by means of its huge network, social media, and telephony between other people to hell MSMEs operators have an understanding of the tax and customs environment particularly if they intend to get into import and export business enterprise.
This is in addition to market place and networking chances by its taxpayers’ roundtables that the taxman organizes to bring jointly businesses for reasons of sharing challenges affecting them and obtaining business enterprise guidance in line with the core enterprise of the authority.
It is in the course of these conferences that the Authority avails options for business people to network and even establish new marketplaces.
Import and export incentives
As a modest organization operator, your target is to improve from serving the area people to accomplishing business globally. No business operator would their venture continue to be stagnant that’s why the have to have for registration.
MSMEs registered with the taxman stand the probability of acquiring import incentives that involve lessened import tariffs on inputs this kind of as machinery and uncooked elements to spur producing of products for export where the authority features free of charge VAT for its members.
The taxman also has a provision for capital allowances on set up equipment and a doable 20 percent export compensation arrangement.
Numerous company chances
Did you know? In line with the govt directive on public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, girls, and people with disabilities which are generally MSMEs. A further rationale why you need to have to register as a tiny enterprise operator.
Unregistered enterprises ought to sign-up as taxpayers in purchase to open up doorways to enterprise alternatives that can only be accessed when the organization acquires the all-critical PIN amount.