In his Eighth State of the Nation Tackle 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 yet a large range of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed equivalent organizations in Kenya.
This means that significantly less than 27 percent of all enterprises in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises even though only 7.1 percent and .7 percent are tiny and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their businesses is that they dread getting subjected to superior taxation that may perhaps stop up taking in on their income.
On the other hand, as you will soon uncover, there are several rewards that await unregistered MSME operators as taxpayers that which include financial loans and govt solutions.
Bid for authorities contracts
As a registered little organization operator as a taxpayer, you will be putting yourself in the very best situation to bid and acquire federal government tenders and trade with the authorities and non-federal government establishments.
If your business is not registered, you are not able to bid for governing administration contracts or even partner with other companies to just take benefit of communal added benefits including vital networks, specifically with more substantial firms with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of helpful organization associations. Merely place, if an business is not a taxpayer it are not able to mature!
Personalised tax and customs advisory expert services
These are companies supplied by the Kenya Profits Authority (KRA) through its wide network, social media, and telephony amongst other folks to hell MSMEs operators fully grasp the tax and customs environment particularly if they intend to get into import and export business.
This is in addition to sector and networking chances by way of its taxpayers’ roundtables that the taxman organizes to convey with each other organizations for purposes of sharing problems affecting them and receiving business enterprise assistance in line with the core business of the authority.
It is for the duration of these conferences that the Authority avails chances for business owners to network and even create new marketplaces.
Import and export incentives
As a compact enterprise operator, your purpose is to develop from serving the area individuals to doing enterprise globally. No organization operator would their venture stay stagnant therefore the want for registration.
MSMEs registered with the taxman stand the probability of acquiring import incentives that incorporate reduced import tariffs on inputs these as machinery and raw materials to spur production of merchandise for export where by the authority provides cost-free VAT for its customers.
The taxman also has a provision for money allowances on installed equipment and a attainable 20 % export compensation arrangement.
A lot of enterprise options
Did you know? In line with the govt directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, gals, and people today with disabilities which are generally MSMEs. A further motive why you need to sign up as a modest enterprise operator.
Unregistered enterprises must sign-up as taxpayers in buy to open doorways to business options that can only be accessed once the organization acquires the all-vital PIN variety.