In his Eighth State of the Nation Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate nevertheless a big number of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed similar organizations in Kenya.
This implies that much less than 27 per cent of all companies in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 percent and .7 per cent are modest and medium enterprises respectively.
The reason some of the MSME operators give for not registering their firms is that they panic becoming subjected to high taxation that may close up consuming on their earnings.
Even so, as you will soon learn, there are numerous advantages that await unregistered MSME operators as taxpayers that including financial loans and authorities products and services.
Bid for governing administration contracts
As a registered small business operator as a taxpayer, you will be putting yourself in the ideal place to bid and acquire authorities tenders and trade with the federal government and non-govt institutions.
If your enterprise is not registered, you simply cannot bid for authorities contracts or even associate with other companies to choose edge of communal benefits which include critical networks, especially with more substantial organizations with who they could even enter into sub-contracts.
For that reason, you will consistently be locked out of practical enterprise associations. Only set, if an organization is not a taxpayer it simply cannot mature!
Personalised tax and customs advisory providers
These are services made available by the Kenya Profits Authority (KRA) via its wide network, social media, and telephony amongst other folks to hell MSMEs operators comprehend the tax and customs natural environment primarily if they intend to get into import and export small business.
This is in addition to industry and networking prospects through its taxpayers’ roundtables that the taxman organizes to carry alongside one another organizations for functions of sharing challenges influencing them and receiving enterprise information in line with the main business enterprise of the authority.
It is all through these meetings that the Authority avails prospects for business owners to community and even set up new markets.
Import and export incentives
As a smaller small business operator, your objective is to develop from serving the nearby people today to carrying out business enterprise globally. No business enterprise operator would their undertaking stay stagnant for this reason the want for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that incorporate lessened import tariffs on inputs this sort of as equipment and uncooked components to spur production of items for export wherever the authority delivers no cost VAT for its users.
The taxman also has a provision for money allowances on installed equipment and a attainable 20 percent export compensation arrangement.
Quite a few company prospects
Did you know? In line with the authorities directive on general public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, females, and individuals with disabilities which are primarily MSMEs. An additional reason why you want to register as a modest organization operator.
Unregistered enterprises should really sign-up as taxpayers in order to open up doorways to business enterprise options that can only be accessed the moment the small business acquires the all-essential PIN amount.