In his Eighth Condition of the Nation Deal with 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 financial state nevertheless a massive amount of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed identical corporations in Kenya.
This signifies that less than 27 p.c of all corporations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises even though only 7.1 % and .7 percent are small and medium enterprises respectively.
The motive some of the MSME operators give for not registering their organizations is that they panic getting subjected to large taxation that could stop up consuming on their revenue.
Nevertheless, as you will before long find, there are lots of positive aspects that await unregistered MSME operators as taxpayers that such as financial loans and govt expert services.
Bid for govt contracts
As a registered small business enterprise operator as a taxpayer, you will be placing by yourself in the greatest place to bid and win authorities tenders and trade with the govt and non-government institutions.
If your small business is not registered, you can not bid for governing administration contracts or even associate with other companies to take gain of communal advantages together with essential networks, specifically with more substantial firms with who they could even enter into sub-contracts.
As a result, you will constantly be locked out of useful company associations. Just put, if an business is not a taxpayer it simply cannot expand!
Individualized tax and customs advisory products and services
These are products and services available by the Kenya Profits Authority (KRA) via its wide network, social media, and telephony among the many others to hell MSMEs operators recognize the tax and customs atmosphere especially if they intend to get into import and export business enterprise.
This is in addition to market place and networking prospects by means of its taxpayers’ roundtables that the taxman organizes to provide with each other firms for applications of sharing difficulties influencing them and obtaining small business information in line with the core business of the authority.
It is for the duration of these conferences that the Authority avails opportunities for entrepreneurs to network and even build new markets.
Import and export incentives
As a tiny company operator, your aim is to mature from serving the local individuals to executing business enterprise globally. No small business operator would their undertaking keep on being stagnant therefore the need for registration.
MSMEs registered with the taxman stand the probability of acquiring import incentives that consist of reduced import tariffs on inputs these as machinery and uncooked resources to spur production of products for export exactly where the authority delivers free VAT for its users.
The taxman also has a provision for capital allowances on set up equipment and a attainable 20 % export payment arrangement.
Several organization options
Did you know? In line with the government directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, gals, and individuals with disabilities which are mainly MSMEs. Yet another cause why you have to have to sign up as a small organization operator.
Unregistered enterprises really should sign up as taxpayers in purchase to open doors to organization opportunities that can only be accessed the moment the business enterprise acquires the all-significant PIN selection.