In his Eighth State of the Country Tackle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy still a substantial variety of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed very similar enterprises in Kenya.
This indicates that much less than 27 % of all enterprises in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 per cent and .7 p.c are little and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their businesses is that they panic currently being subjected to high taxation that may perhaps stop up having on their profit.
However, as you will before long explore, there are quite a few added benefits that await unregistered MSME operators as taxpayers that like financial loans and federal government companies.
Bid for govt contracts
As a registered tiny business operator as a taxpayer, you will be placing oneself in the finest situation to bid and get authorities tenders and trade with the government and non-govt establishments.
If your organization is not registered, you are unable to bid for government contracts or even partner with other businesses to consider benefit of communal rewards like vital networks, specially with greater firms with who they could even enter into sub-contracts.
Therefore, you will continuously be locked out of handy organization associations. Simply place, if an enterprise is not a taxpayer it can’t expand!
Personalized tax and customs advisory providers
These are services presented by the Kenya Revenue Authority (KRA) by way of its vast community, social media, and telephony amongst others to hell MSMEs operators recognize the tax and customs environment specially if they intend to get into import and export small business.
This is in addition to marketplace and networking alternatives by means of its taxpayers’ roundtables that the taxman organizes to deliver together firms for uses of sharing troubles influencing them and getting business enterprise assistance in line with the main business enterprise of the authority.
It is through these conferences that the Authority avails prospects for business owners to community and even establish new markets.
Import and export incentives
As a compact small business operator, your goal is to expand from serving the nearby people to executing company globally. No business operator would their undertaking stay stagnant hence the want for registration.
MSMEs registered with the taxman stand the prospect of receiving import incentives that contain decreased import tariffs on inputs such as equipment and uncooked resources to spur production of products for export where by the authority offers no cost VAT for its associates.
The taxman also has a provision for money allowances on set up machinery and a feasible 20 percent export compensation arrangement.
A lot of company chances
Did you know? In line with the authorities directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, females, and people with disabilities which are generally MSMEs. Another cause why you have to have to register as a small organization operator.
Unregistered enterprises ought to sign up as taxpayers in get to open up doors to business enterprise chances that can only be accessed once the organization acquires the all-significant PIN number.