In his Eighth Point out of the Country Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system but a massive selection of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related corporations in Kenya.
This usually means that less than 27 % of all enterprises in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 % and .7 p.c are tiny and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their enterprises is that they dread staying subjected to high taxation that may possibly conclusion up taking in on their gain.
Nevertheless, as you will shortly discover, there are a lot of added benefits that await unregistered MSME operators as taxpayers that together with financial loans and govt services.
Bid for government contracts
As a registered little company operator as a taxpayer, you will be putting yourself in the most effective position to bid and acquire governing administration tenders and trade with the governing administration and non-federal government institutions.
If your organization is not registered, you simply cannot bid for government contracts or even companion with other enterprises to choose gain of communal advantages such as important networks, specially with much larger providers with who they could even enter into sub-contracts.
As a result, you will constantly be locked out of handy company associations. Only place, if an company is not a taxpayer it simply cannot grow!
Customized tax and customs advisory providers
These are providers offered by the Kenya Profits Authority (KRA) by way of its large community, social media, and telephony among others to hell MSMEs operators have an understanding of the tax and customs environment primarily if they intend to get into import and export company.
This is in addition to current market and networking alternatives as a result of its taxpayers’ roundtables that the taxman organizes to provide alongside one another organizations for purposes of sharing issues impacting them and getting company information in line with the main enterprise of the authority.
It is all through these meetings that the Authority avails options for business people to community and even set up new markets.
Import and export incentives
As a little organization operator, your target is to improve from serving the community folks to carrying out enterprise globally. No company operator would their venture continue to be stagnant consequently the have to have for registration.
MSMEs registered with the taxman stand the possibility of acquiring import incentives that include decreased import tariffs on inputs such as machinery and uncooked supplies to spur producing of goods for export exactly where the authority provides free VAT for its associates.
The taxman also has a provision for funds allowances on put in equipment and a feasible 20 percent export compensation arrangement.
Quite a few enterprise chances
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, women of all ages, and individuals with disabilities which are largely MSMEs. A different cause why you need to have to sign-up as a smaller enterprise operator.
Unregistered enterprises need to register as taxpayers in get to open doors to business enterprise possibilities that can only be accessed at the time the small business acquires the all-crucial PIN amount.