In his Eighth State of the Nation Handle 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 overall economy but a huge variety of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed comparable businesses in Kenya.
This signifies that fewer than 27 % of all organizations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises whilst only 7.1 percent and .7 percent are smaller and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their corporations is that they fear remaining subjected to large taxation that may possibly conclude up consuming on their income.
Nevertheless, as you will soon find, there are many benefits that await unregistered MSME operators as taxpayers that which include financial loans and governing administration companies.
Bid for govt contracts
As a registered tiny company operator as a taxpayer, you will be placing oneself in the most effective posture to bid and gain governing administration tenders and trade with the governing administration and non-govt institutions.
If your small business is not registered, you are unable to bid for government contracts or even companion with other companies to choose advantage of communal gains together with crucial networks, primarily with bigger providers with who they could even enter into sub-contracts.
Hence, you will consistently be locked out of beneficial organization associations. Simply just place, if an company is not a taxpayer it are not able to increase!
Personalised tax and customs advisory companies
These are expert services available by the Kenya Revenue Authority (KRA) via its wide network, social media, and telephony among the some others to hell MSMEs operators understand the tax and customs atmosphere in particular if they intend to get into import and export business.
This is in addition to sector and networking prospects through its taxpayers’ roundtables that the taxman organizes to convey together enterprises for needs of sharing difficulties affecting them and receiving organization information in line with the main business enterprise of the authority.
It is for the duration of these meetings that the Authority avails prospects for business people to community and even build new markets.
Import and export incentives
As a little enterprise operator, your target is to increase from serving the regional folks to executing organization globally. No enterprise operator would their undertaking keep on being stagnant therefore the need to have for registration.
MSMEs registered with the taxman stand the probability of receiving import incentives that consist of diminished import tariffs on inputs such as equipment and uncooked products to spur producing of items for export exactly where the authority offers totally free VAT for its associates.
The taxman also has a provision for capital allowances on mounted equipment and a achievable 20 p.c export compensation arrangement.
Quite a few business enterprise possibilities
Did you know? In line with the government directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, women of all ages, and men and women with disabilities which are mainly MSMEs. One more motive why you need to have to register as a small company operator.
Unregistered enterprises need to register as taxpayers in order to open up doorways to company opportunities that can only be accessed as soon as the organization acquires the all-essential PIN amount.