In his Eighth Condition of the Nation Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate however a substantial range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related firms in Kenya.
This means that a lot less than 27 percent of all enterprises in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 per cent and .7 p.c are little and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their corporations is that they concern remaining subjected to higher taxation that may possibly stop up consuming on their revenue.
Even so, as you will shortly learn, there are quite a few gains that await unregistered MSME operators as taxpayers that like loans and govt providers.
Bid for governing administration contracts
As a registered small organization operator as a taxpayer, you will be putting on your own in the finest posture to bid and get authorities tenders and trade with the federal government and non-govt establishments.
If your business enterprise is not registered, you can’t bid for authorities contracts or even lover with other organizations to take edge of communal gains like very important networks, specifically with bigger firms with who they could even enter into sub-contracts.
Thus, you will continually be locked out of practical business associations. Only put, if an organization is not a taxpayer it are not able to grow!
Customized tax and customs advisory services
These are products and services presented by the Kenya Income Authority (KRA) by its huge network, social media, and telephony among the other folks to hell MSMEs operators recognize the tax and customs setting specially if they intend to get into import and export business enterprise.
This is in addition to sector and networking chances by its taxpayers’ roundtables that the taxman organizes to carry jointly enterprises for functions of sharing challenges impacting them and acquiring business information in line with the main organization of the authority.
It is through these meetings that the Authority avails prospects for business owners to community and even set up new markets.
Import and export incentives
As a modest business operator, your target is to expand from serving the community men and women to accomplishing business enterprise globally. No enterprise operator would their venture remain stagnant as a result the want for registration.
MSMEs registered with the taxman stand the likelihood of obtaining import incentives that include things like lessened import tariffs on inputs these as machinery and raw materials to spur producing of merchandise for export the place the authority delivers no cost VAT for its customers.
The taxman also has a provision for funds allowances on installed machinery and a attainable 20 percent export payment arrangement.
Various company opportunities
Did you know? In line with the governing administration directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, ladies, and people today with disabilities which are mainly MSMEs. Another cause why you want to register as a tiny enterprise operator.
Unregistered enterprises must register as taxpayers in get to open doorways to company opportunities that can only be accessed at the time the organization acquires the all-crucial PIN selection.