In his Eighth Point out of the Nation Tackle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy but a big amount of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable corporations in Kenya.
This means that a lot less than 27 % of all companies in Kenya are registered. Out of these, 92.2 % are micro-enterprises although only 7.1 % and .7 percent are little and medium enterprises respectively.
The reason some of the MSME operators give for not registering their enterprises is that they dread currently being subjected to significant taxation that may possibly finish up eating on their gain.
Having said that, as you will quickly uncover, there are a lot of advantages that await unregistered MSME operators as taxpayers that including loans and govt solutions.
Bid for authorities contracts
As a registered little organization operator as a taxpayer, you will be putting by yourself in the best placement to bid and acquire govt tenders and trade with the governing administration and non-federal government establishments.
If your business enterprise is not registered, you can not bid for governing administration contracts or even husband or wife with other corporations to choose benefit of communal rewards which include critical networks, primarily with more substantial providers with who they could even enter into sub-contracts.
Thus, you will repeatedly be locked out of helpful company associations. Simply just set, if an business is not a taxpayer it cannot grow!
Individualized tax and customs advisory products and services
These are expert services offered by the Kenya Earnings Authority (KRA) by way of its large network, social media, and telephony amid other individuals to hell MSMEs operators realize the tax and customs atmosphere especially if they intend to get into import and export business enterprise.
This is in addition to current market and networking prospects by its taxpayers’ roundtables that the taxman organizes to carry with each other organizations for reasons of sharing difficulties impacting them and receiving business enterprise suggestions in line with the core company of the authority.
It is for the duration of these conferences that the Authority avails chances for business people to network and even establish new marketplaces.
Import and export incentives
As a tiny organization operator, your intention is to improve from serving the regional individuals to doing organization globally. No small business operator would their undertaking remain stagnant for this reason the require for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that incorporate decreased import tariffs on inputs these types of as equipment and uncooked components to spur production of goods for export where the authority provides cost-free VAT for its users.
The taxman also has a provision for funds allowances on put in equipment and a doable 20 p.c export compensation arrangement.
A lot of organization prospects
Did you know? In line with the government directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and people today with disabilities which are primarily MSMEs. A further explanation why you will need to sign-up as a smaller business operator.
Unregistered enterprises ought to sign-up as taxpayers in order to open up doorways to company alternatives that can only be accessed once the business acquires the all-critical PIN quantity.