In his Eighth State of the Nation Deal with on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nevertheless 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 equivalent firms in Kenya.
This usually means that fewer than 27 per cent of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises whilst only 7.1 % and .7 p.c are small and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their firms is that they dread getting subjected to high taxation that may well end up consuming on their profit.
Nevertheless, as you will shortly find out, there are a lot of positive aspects that await unregistered MSME operators as taxpayers that like financial loans and authorities products and services.
Bid for government contracts
As a registered little business enterprise operator as a taxpayer, you will be putting yourself in the best place to bid and win federal government tenders and trade with the governing administration and non-government institutions.
If your business enterprise is not registered, you simply cannot bid for govt contracts or even partner with other companies to just take benefit of communal benefits which include important networks, specially with larger sized companies with who they could even enter into sub-contracts.
For that reason, you will constantly be locked out of handy enterprise associations. Simply put, if an organization is not a taxpayer it simply cannot grow!
Individualized tax and customs advisory products and services
These are providers supplied by the Kenya Revenue Authority (KRA) via its wide network, social media, and telephony amongst other individuals to hell MSMEs operators realize the tax and customs setting particularly if they intend to get into import and export enterprise.
This is in addition to sector and networking alternatives through its taxpayers’ roundtables that the taxman organizes to carry together organizations for purposes of sharing issues affecting them and acquiring company advice in line with the main organization of the authority.
It is through these meetings that the Authority avails options for business people to network and even build new marketplaces.
Import and export incentives
As a little organization operator, your objective is to develop from serving the nearby men and women to undertaking business enterprise globally. No business enterprise operator would their enterprise continue to be stagnant as a result the have to have for registration.
MSMEs registered with the taxman stand the chance of receiving import incentives that include lowered import tariffs on inputs this sort of as machinery and raw products to spur production of goods for export in which the authority offers absolutely free VAT for its users.
The taxman also has a provision for capital allowances on installed equipment and a achievable 20 percent export compensation arrangement.
Many business enterprise chances
Did you know? In line with the govt directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, females, and persons with disabilities which are primarily MSMEs. A different purpose why you require to sign-up as a compact business operator.
Unregistered enterprises should register as taxpayers in get to open doors to small business options that can only be accessed at the time the company acquires the all-critical PIN quantity.