In his Eighth Condition of the Country Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy however a substantial 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 corporations in Kenya.
This indicates that a lot 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 % and .7 per cent are tiny and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their companies is that they panic becoming subjected to significant taxation that may well finish up taking in on their financial gain.
However, as you will shortly uncover, there are several added benefits that await unregistered MSME operators as taxpayers that which include financial loans and government services.
Bid for governing administration contracts
As a registered tiny small business operator as a taxpayer, you will be placing on your own in the ideal placement to bid and get governing administration tenders and trade with the govt and non-govt establishments.
If your enterprise is not registered, you cannot bid for authorities contracts or even husband or wife with other enterprises to choose gain of communal rewards together with crucial networks, specially with much larger firms with who they could even enter into sub-contracts.
For that reason, you will continuously be locked out of beneficial business enterprise associations. Only set, if an organization is not a taxpayer it are not able to expand!
Personalized tax and customs advisory services
These are expert services available by the Kenya Earnings Authority (KRA) as a result of its large network, social media, and telephony between other individuals to hell MSMEs operators realize the tax and customs atmosphere particularly if they intend to get into import and export organization.
This is in addition to market place and networking chances by means of its taxpayers’ roundtables that the taxman organizes to carry jointly enterprises for uses of sharing issues affecting them and acquiring business assistance in line with the main company of the authority.
It is in the course of these meetings that the Authority avails opportunities for business owners to network and even set up new marketplaces.
Import and export incentives
As a small business enterprise operator, your intention is to grow from serving the local men and women to carrying out business enterprise globally. No business enterprise operator would their venture continue being stagnant that’s why the will need for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that contain reduced import tariffs on inputs this sort of as equipment and uncooked components to spur producing of goods for export where the authority presents free of charge VAT for its members.
The taxman also has a provision for cash allowances on installed equipment and a probable 20 p.c export payment arrangement.
Many small business options
Did you know? In line with the government directive on public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, ladies, and individuals with disabilities which are predominantly MSMEs. Yet another purpose why you need to sign-up as a little business operator.
Unregistered enterprises really should sign-up as taxpayers in get to open up doors to business options that can only be accessed at the time the company acquires the all-vital PIN range.