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, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system however a massive variety of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed equivalent companies in Kenya.
This suggests that less than 27 per cent of all enterprises in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 p.c and .7 per cent are modest and medium enterprises respectively.
The motive some of the MSME operators give for not registering their organizations is that they anxiety becoming subjected to superior taxation that might end up consuming on their financial gain.
Having said that, as you will before long explore, there are a lot of gains that await unregistered MSME operators as taxpayers that which include financial loans and federal government products and services.
Bid for authorities contracts
As a registered tiny small business operator as a taxpayer, you will be placing on your own in the finest posture to bid and win government tenders and trade with the governing administration and non-govt institutions.
If your company is not registered, you are unable to bid for government contracts or even companion with other organizations to get benefit of communal gains like important networks, particularly with much larger companies with who they could even enter into sub-contracts.
Hence, you will continuously be locked out of handy business enterprise associations. Simply just set, if an enterprise is not a taxpayer it simply cannot improve!
Personalized tax and customs advisory solutions
These are solutions available by the Kenya Profits Authority (KRA) as a result of its extensive network, social media, and telephony amongst others to hell MSMEs operators understand the tax and customs ecosystem specially if they intend to get into import and export business.
This is in addition to market and networking possibilities through its taxpayers’ roundtables that the taxman organizes to convey collectively enterprises for applications of sharing issues influencing them and getting small business suggestions in line with the main small business of the authority.
It is through these conferences that the Authority avails prospects for entrepreneurs to community and even build new marketplaces.
Import and export incentives
As a smaller company operator, your goal is to increase from serving the area persons to performing small business globally. No enterprise operator would their venture continue to be stagnant consequently the want for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that incorporate minimized import tariffs on inputs this sort of as machinery and raw products to spur manufacturing of items for export where the authority delivers no cost VAT for its users.
The taxman also has a provision for money allowances on put in equipment and a attainable 20 percent export compensation arrangement.
Various business alternatives
Did you know? In line with the authorities directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, gals, and persons with disabilities which are primarily MSMEs. One more rationale why you will need to sign-up as a compact company operator.
Unregistered enterprises should register as taxpayers in buy to open doors to business possibilities that can only be accessed the moment the business enterprise acquires the all-important PIN quantity.