In his Eighth Point out of the Country Deal with 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 economic climate but a massive variety of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed related firms in Kenya.
This implies that significantly less than 27 % of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 per cent and .7 percent are little and medium enterprises respectively.
The motive some of the MSME operators give for not registering their organizations is that they panic staying subjected to large taxation that may well end up feeding on on their financial gain.
On the other hand, as you will soon find, there are several advantages that await unregistered MSME operators as taxpayers that which includes financial loans and governing administration providers.
Bid for authorities contracts
As a registered little business operator as a taxpayer, you will be placing yourself in the ideal place to bid and earn federal government tenders and trade with the authorities and non-governing administration institutions.
If your small business is not registered, you cannot bid for government contracts or even spouse with other enterprises to just take edge of communal positive aspects which include crucial networks, especially with much larger firms with who they could even enter into sub-contracts.
For that reason, you will repeatedly be locked out of helpful enterprise associations. Merely put, if an company is not a taxpayer it can’t improve!
Individualized tax and customs advisory services
These are companies made available by the Kenya Income Authority (KRA) via its huge network, social media, and telephony amid many others to hell MSMEs operators realize the tax and customs setting specially if they intend to get into import and export enterprise.
This is in addition to current market and networking prospects by means of its taxpayers’ roundtables that the taxman organizes to carry collectively organizations for applications of sharing challenges impacting them and receiving small business guidance in line with the core company of the authority.
It is through these conferences that the Authority avails alternatives for business people to network and even create new marketplaces.
Import and export incentives
As a smaller company operator, your target is to mature from serving the regional people to carrying out company globally. No company operator would their venture continue being stagnant hence the want for registration.
MSMEs registered with the taxman stand the likelihood of obtaining import incentives that incorporate decreased import tariffs on inputs these as equipment and uncooked supplies to spur manufacturing of goods for export where the authority features totally free VAT for its members.
The taxman also has a provision for money allowances on mounted equipment and a doable 20 % export compensation arrangement.
Several small business alternatives
Did you know? In line with the federal government directive on public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, gals, and folks with disabilities which are mainly MSMEs. Another rationale why you require to sign-up as a tiny business operator.
Unregistered enterprises ought to sign up as taxpayers in order to open up doorways to business enterprise possibilities that can only be accessed as soon as the small business acquires the all-essential PIN amount.