In his Eighth State of the Nation Tackle 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 financial state yet a massive quantity of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed identical companies in Kenya.
This usually means that less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 % are micro-enterprises though only 7.1 % and .7 p.c are small and medium enterprises respectively.
The cause some of the MSME operators give for not registering their businesses is that they panic getting subjected to large taxation that might end up taking in on their gain.
Nonetheless, as you will quickly discover, there are lots of rewards that await unregistered MSME operators as taxpayers that which include loans and authorities expert services.
Bid for government contracts
As a registered smaller business operator as a taxpayer, you will be putting by yourself in the ideal posture to bid and acquire authorities tenders and trade with the govt and non-govt establishments.
If your small business is not registered, you cannot bid for governing administration contracts or even lover with other companies to acquire advantage of communal advantages which includes essential networks, in particular with larger organizations with who they could even enter into sub-contracts.
Therefore, you will continually be locked out of useful company associations. Only place, if an organization is not a taxpayer it are unable to expand!
Personalized tax and customs advisory services
These are companies offered by the Kenya Earnings Authority (KRA) as a result of its large network, social media, and telephony among other individuals to hell MSMEs operators have an understanding of the tax and customs natural environment in particular if they intend to get into import and export small business.
This is in addition to current market and networking chances as a result of its taxpayers’ roundtables that the taxman organizes to carry alongside one another organizations for reasons of sharing concerns affecting them and obtaining company information in line with the main organization of the authority.
It is through these conferences that the Authority avails options for entrepreneurs to community and even establish new markets.
Import and export incentives
As a small business enterprise operator, your aim is to increase from serving the area people today to performing business globally. No company operator would their venture keep on being stagnant hence the have to have for registration.
MSMEs registered with the taxman stand the possibility of obtaining import incentives that contain reduced import tariffs on inputs this sort of as equipment and uncooked resources to spur producing of merchandise for export exactly where the authority gives free of charge VAT for its associates.
The taxman also has a provision for funds allowances on mounted equipment and a possible 20 % export compensation arrangement.
Quite a few small business possibilities
Did you know? In line with the federal government directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, girls, and men and women with disabilities which are largely MSMEs. A further rationale why you need to have to sign-up as a compact business enterprise operator.
Unregistered enterprises should register as taxpayers in purchase to open up doorways to small business options that can only be accessed at the time the business enterprise acquires the all-essential PIN amount.