In his Eighth Condition of the Nation Deal with on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state yet a large selection of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable enterprises in Kenya.
This indicates that significantly less than 27 per cent of all organizations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises while only 7.1 percent and .7 % are smaller and medium enterprises respectively.
The cause some of the MSME operators give for not registering their organizations is that they anxiety getting subjected to high taxation that may perhaps stop up ingesting on their financial gain.
Nonetheless, as you will quickly learn, there are a lot of rewards that await unregistered MSME operators as taxpayers that together with loans and authorities providers.
Bid for governing administration contracts
As a registered compact business operator as a taxpayer, you will be placing yourself in the finest position to bid and gain governing administration tenders and trade with the government and non-federal government institutions.
If your company is not registered, you cannot bid for authorities contracts or even partner with other companies to just take gain of communal added benefits which include crucial networks, especially with larger providers with who they could even enter into sub-contracts.
For that reason, you will continually be locked out of helpful organization associations. Basically place, if an company is not a taxpayer it cannot improve!
Individualized tax and customs advisory providers
These are expert services supplied by the Kenya Profits Authority (KRA) by its vast community, social media, and telephony among other people to hell MSMEs operators realize the tax and customs ecosystem specifically if they intend to get into import and export organization.
This is in addition to market and networking opportunities through its taxpayers’ roundtables that the taxman organizes to bring collectively corporations for uses of sharing troubles affecting them and getting business information in line with the core organization of the authority.
It is all through these conferences that the Authority avails possibilities for business people to community and even create new markets.
Import and export incentives
As a compact business enterprise operator, your target is to grow from serving the local people today to executing business enterprise globally. No business operator would their undertaking stay stagnant as a result the will need for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that involve decreased import tariffs on inputs these types of as machinery and raw components to spur producing of items for export wherever the authority features totally free VAT for its users.
The taxman also has a provision for capital allowances on mounted equipment and a feasible 20 % export compensation arrangement.
A lot of organization prospects
Did you know? In line with the government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, ladies, and men and women with disabilities which are largely MSMEs. Yet another rationale why you have to have to register as a small business enterprise operator.
Unregistered enterprises must sign up as taxpayers in order to open up doors to enterprise options that can only be accessed when the business acquires the all-important PIN number.