In his Eighth Condition of the Country Deal with on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system however a huge quantity of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable firms in Kenya.
This usually means that significantly less than 27 percent of all corporations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises when only 7.1 percent and .7 percent are compact and medium enterprises respectively.
The motive some of the MSME operators give for not registering their organizations is that they anxiety becoming subjected to higher taxation that may well stop up feeding on on their income.
Even so, as you will before long explore, there are lots of benefits that await unregistered MSME operators as taxpayers that like loans and governing administration services.
Bid for authorities contracts
As a registered compact company operator as a taxpayer, you will be placing by yourself in the best posture to bid and win governing administration tenders and trade with the federal government and non-governing administration institutions.
If your business enterprise is not registered, you cannot bid for authorities contracts or even associate with other corporations to take advantage of communal gains which includes critical networks, specifically with bigger organizations with who they could even enter into sub-contracts.
For that reason, you will consistently be locked out of valuable company associations. Just place, if an business is not a taxpayer it cannot improve!
Individualized tax and customs advisory providers
These are providers offered by the Kenya Revenue Authority (KRA) as a result of its broad network, social media, and telephony between others to hell MSMEs operators realize the tax and customs surroundings specially if they intend to get into import and export enterprise.
This is in addition to marketplace and networking options by means of its taxpayers’ roundtables that the taxman organizes to bring alongside one another companies for purposes of sharing issues affecting them and receiving business advice 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 owners to network and even establish new marketplaces.
Import and export incentives
As a tiny company operator, your purpose is to develop from serving the nearby men and women to performing business globally. No small business operator would their undertaking continue being stagnant therefore the have to have for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that include reduced import tariffs on inputs these as machinery and raw resources to spur manufacturing of merchandise for export in which the authority provides cost-free VAT for its customers.
The taxman also has a provision for funds allowances on set up equipment and a feasible 20 p.c export compensation arrangement.
Numerous business enterprise chances
Did you know? In line with the governing administration directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and individuals with disabilities which are generally MSMEs. An additional cause why you will need to sign up as a small enterprise operator.
Unregistered enterprises should register as taxpayers in order to open up doorways to business chances that can only be accessed as soon as the enterprise acquires the all-vital PIN amount.