In his Eighth Point out of the Country Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nonetheless a substantial range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed similar enterprises in Kenya.
This indicates that much less than 27 per cent of all businesses in Kenya are registered. Out of these, 92.2 % are micro-enterprises whilst only 7.1 p.c and .7 % are smaller and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their organizations is that they concern getting subjected to superior taxation that may possibly close up ingesting on their financial gain.
Nonetheless, as you will before long discover, there are a lot of gains that await unregistered MSME operators as taxpayers that which include loans and governing administration companies.
Bid for govt contracts
As a registered compact small business operator as a taxpayer, you will be putting on your own in the most effective posture to bid and earn govt tenders and trade with the govt and non-government establishments.
If your organization is not registered, you are not able to bid for federal government contracts or even husband or wife with other corporations to consider advantage of communal rewards like very important networks, specially with greater corporations with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of beneficial business associations. Merely place, if an organization is not a taxpayer it simply cannot develop!
Personalized tax and customs advisory expert services
These are solutions provided by the Kenya Earnings Authority (KRA) as a result of its broad network, social media, and telephony among other folks to hell MSMEs operators fully grasp the tax and customs setting primarily if they intend to get into import and export business.
This is in addition to current market and networking chances by means of its taxpayers’ roundtables that the taxman organizes to provide with each other organizations for reasons of sharing difficulties impacting them and acquiring small business advice in line with the main business of the authority.
It is through these meetings that the Authority avails possibilities for entrepreneurs to community and even set up new marketplaces.
Import and export incentives
As a smaller enterprise operator, your objective is to improve from serving the neighborhood individuals to undertaking enterprise globally. No company operator would their venture continue being stagnant for this reason the require for registration.
MSMEs registered with the taxman stand the possibility of getting import incentives that incorporate lowered import tariffs on inputs these kinds of as machinery and uncooked components to spur manufacturing of items for export wherever the authority provides totally free VAT for its users.
The taxman also has a provision for capital allowances on put in equipment and a probable 20 per cent export compensation arrangement.
Several business enterprise opportunities
Did you know? In line with the government directive on community procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, women, and people with disabilities which are predominantly MSMEs. A different cause why you want to register as a little business enterprise operator.
Unregistered enterprises must sign-up as taxpayers in order to open up doorways to organization chances that can only be accessed as soon as the small business acquires the all-vital PIN number.