In his Eighth Condition of the Country Address 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 still a substantial amount of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed very similar corporations in Kenya.
This means that a lot less than 27 per cent of all organizations in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 p.c and .7 % are small and medium enterprises respectively.
The reason some of the MSME operators give for not registering their enterprises is that they concern remaining subjected to high taxation that could finish up feeding on on their revenue.
Nonetheless, as you will soon discover, there are several benefits that await unregistered MSME operators as taxpayers that together with financial loans and authorities products and services.
Bid for government contracts
As a registered tiny business enterprise operator as a taxpayer, you will be putting by yourself in the ideal situation to bid and gain government tenders and trade with the federal government and non-authorities institutions.
If your small business is not registered, you simply cannot bid for authorities contracts or even partner with other businesses to acquire gain of communal positive aspects like vital networks, specially with larger corporations with who they could even enter into sub-contracts.
As a result, you will repeatedly be locked out of handy company associations. Basically place, if an enterprise is not a taxpayer it cannot improve!
Personalised tax and customs advisory providers
These are companies available by the Kenya Earnings Authority (KRA) by its wide community, social media, and telephony amid other people to hell MSMEs operators comprehend the tax and customs ecosystem in particular if they intend to get into import and export business.
This is in addition to market place and networking alternatives by way of its taxpayers’ roundtables that the taxman organizes to carry jointly enterprises for needs of sharing challenges impacting them and getting organization suggestions in line with the main business enterprise of the authority.
It is during these conferences that the Authority avails possibilities for business people to network and even set up new marketplaces.
Import and export incentives
As a tiny organization operator, your intention is to increase from serving the area men and women to undertaking business enterprise globally. No business operator would their venture remain stagnant as a result the need for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that consist of decreased import tariffs on inputs these types of as machinery and raw products to spur production of merchandise for export where by the authority provides free of charge VAT for its associates.
The taxman also has a provision for cash allowances on installed equipment and a doable 20 % export compensation arrangement.
Several business enterprise options
Did you know? In line with the federal government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, ladies, and folks with disabilities which are predominantly MSMEs. A different cause why you require to register as a smaller small business operator.
Unregistered enterprises ought to register as taxpayers in purchase to open up doors to business enterprise chances that can only be accessed the moment the business acquires the all-vital PIN selection.