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, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy but a massive variety of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed similar organizations in Kenya.
This means that much less than 27 % of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 percent and .7 percent are compact and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their firms is that they dread becoming subjected to higher taxation that may possibly conclude up feeding on on their financial gain.
Nevertheless, as you will quickly find, there are several rewards that await unregistered MSME operators as taxpayers that which include financial loans and govt providers.
Bid for authorities contracts
As a registered modest small business operator as a taxpayer, you will be placing on your own in the very best placement to bid and gain government tenders and trade with the federal government and non-governing administration establishments.
If your company is not registered, you can not bid for governing administration contracts or even partner with other businesses to just take advantage of communal gains which includes essential networks, in particular with much larger corporations with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of beneficial business associations. Just put, if an business is not a taxpayer it simply cannot develop!
Customized tax and customs advisory solutions
These are solutions offered by the Kenya Profits Authority (KRA) through its huge network, social media, and telephony amongst other individuals to hell MSMEs operators recognize the tax and customs surroundings particularly if they intend to get into import and export small business.
This is in addition to market and networking chances via its taxpayers’ roundtables that the taxman organizes to bring together businesses for functions of sharing troubles impacting them and receiving enterprise guidance in line with the core organization of the authority.
It is for the duration of these conferences that the Authority avails chances for business owners to community and even establish new marketplaces.
Import and export incentives
As a little enterprise operator, your purpose is to develop from serving the nearby people today to doing enterprise globally. No business enterprise operator would their enterprise remain stagnant consequently the want for registration.
MSMEs registered with the taxman stand the probability of getting import incentives that include things like reduced import tariffs on inputs these types of as equipment and uncooked supplies to spur production of items for export where the authority delivers no cost VAT for its users.
The taxman also has a provision for funds allowances on put in equipment and a attainable 20 p.c export compensation arrangement.
Many enterprise options
Did you know? In line with the government directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, ladies, and persons with disabilities which are largely MSMEs. Another reason why you need to sign up as a little business operator.
Unregistered enterprises must register as taxpayers in buy to open up doors to business opportunities that can only be accessed after the organization acquires the all-crucial PIN number.