In his Eighth Point out of the Nation Tackle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy nevertheless a massive selection of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable companies in Kenya.
This indicates that much less than 27 % of all organizations in Kenya are registered. Out of these, 92.2 % are micro-enterprises although only 7.1 per cent and .7 percent are small and medium enterprises respectively.
The motive some of the MSME operators give for not registering their organizations is that they concern being subjected to large taxation that may perhaps conclude up eating on their revenue.
Nonetheless, as you will before long discover, there are a lot of rewards that await unregistered MSME operators as taxpayers that which include financial loans and government expert services.
Bid for govt contracts
As a registered small organization operator as a taxpayer, you will be putting on your own in the finest placement to bid and earn govt tenders and trade with the governing administration and non-govt establishments.
If your company is not registered, you are not able to bid for authorities contracts or even spouse with other companies to choose edge of communal benefits including important networks, in particular with larger sized corporations with who they could even enter into sub-contracts.
As a result, you will consistently be locked out of beneficial company associations. Simply just set, if an company is not a taxpayer it simply cannot increase!
Customized tax and customs advisory expert services
These are services available by the Kenya Revenue Authority (KRA) via its huge network, social media, and telephony among the some others to hell MSMEs operators understand the tax and customs environment particularly if they intend to get into import and export business.
This is in addition to sector and networking possibilities via its taxpayers’ roundtables that the taxman organizes to deliver jointly firms for functions of sharing issues affecting them and receiving company assistance in line with the core business of the authority.
It is throughout these conferences that the Authority avails possibilities for business owners to community and even create new markets.
Import and export incentives
As a modest business operator, your target is to grow from serving the nearby people to executing company globally. No small business operator would their enterprise remain stagnant therefore the have to have for registration.
MSMEs registered with the taxman stand the opportunity of obtaining import incentives that include things like lessened import tariffs on inputs this sort of as machinery and raw products to spur producing of products for export the place the authority provides totally free VAT for its customers.
The taxman also has a provision for cash allowances on set up equipment and a doable 20 % export compensation arrangement.
Various enterprise alternatives
Did you know? In line with the governing administration directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women, and individuals with disabilities which are predominantly MSMEs. An additional rationale why you want to register as a smaller small business operator.
Unregistered enterprises really should register as taxpayers in buy to open doors to organization possibilities that can only be accessed after the business enterprise acquires the all-important PIN variety.