In his Eighth Condition of the Nation Address on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nonetheless a enormous range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed very similar corporations in Kenya.
This signifies that considerably less than 27 % of all organizations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 percent and .7 % are tiny and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their companies is that they concern currently being subjected to substantial taxation that may close up ingesting on their income.
Even so, as you will quickly find, there are quite a few added benefits that await unregistered MSME operators as taxpayers that together with loans and federal government products and services.
Bid for federal government contracts
As a registered tiny small business operator as a taxpayer, you will be placing on your own in the best placement to bid and gain federal government tenders and trade with the federal government and non-authorities institutions.
If your business is not registered, you are not able to bid for authorities contracts or even associate with other organizations to consider advantage of communal added benefits together with important networks, especially with much larger firms with who they could even enter into sub-contracts.
As a result, you will repeatedly be locked out of beneficial organization associations. Simply put, if an enterprise is not a taxpayer it cannot increase!
Customized tax and customs advisory companies
These are services available by the Kenya Revenue Authority (KRA) through its vast community, social media, and telephony amongst other individuals to hell MSMEs operators fully grasp the tax and customs ecosystem particularly if they intend to get into import and export company.
This is in addition to market and networking options by its taxpayers’ roundtables that the taxman organizes to bring alongside one another corporations for uses of sharing troubles influencing them and getting business enterprise information in line with the core business of the authority.
It is in the course of these conferences that the Authority avails prospects for entrepreneurs to network and even set up new markets.
Import and export incentives
As a little small business operator, your purpose is to improve from serving the community people to executing business enterprise globally. No enterprise operator would their undertaking keep on being stagnant consequently the need for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that contain diminished import tariffs on inputs these kinds of as machinery and raw products to spur production of merchandise for export where the authority features absolutely free VAT for its users.
The taxman also has a provision for cash allowances on set up machinery and a achievable 20 percent export compensation arrangement.
Numerous enterprise options
Did you know? In line with the federal government directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, girls, and folks with disabilities which are predominantly MSMEs. A further cause why you want to register as a compact organization operator.
Unregistered enterprises really should sign-up as taxpayers in order to open up doors to small business alternatives that can only be accessed after the business acquires the all-significant PIN variety.