In his Eighth Condition of the Country Tackle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system yet a massive selection of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable firms in Kenya.
This indicates that much less than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises even though only 7.1 percent and .7 per cent are modest and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their corporations is that they worry staying subjected to substantial taxation that could conclude up ingesting on their earnings.
Even so, as you will shortly explore, there are many advantages that await unregistered MSME operators as taxpayers that together with financial loans and authorities products and services.
Bid for governing administration contracts
As a registered small organization operator as a taxpayer, you will be placing yourself in the best place to bid and gain authorities tenders and trade with the federal government and non-authorities institutions.
If your company is not registered, you are not able to bid for government contracts or even spouse with other firms to acquire gain of communal advantages like very important networks, especially with greater corporations with who they could even enter into sub-contracts.
Thus, you will continuously be locked out of beneficial business enterprise associations. Only set, if an business is not a taxpayer it can not improve!
Individualized tax and customs advisory providers
These are services supplied by the Kenya Income Authority (KRA) by way of its wide community, social media, and telephony amid many others to hell MSMEs operators realize the tax and customs surroundings primarily if they intend to get into import and export business enterprise.
This is in addition to market place and networking options by way of its taxpayers’ roundtables that the taxman organizes to deliver collectively enterprises for functions of sharing problems affecting them and getting company suggestions in line with the core small business of the authority.
It is throughout these meetings that the Authority avails options for entrepreneurs to network and even establish new marketplaces.
Import and export incentives
As a smaller business enterprise operator, your target is to expand from serving the regional people to carrying out enterprise globally. No small business operator would their undertaking keep on being stagnant as a result the have to have for registration.
MSMEs registered with the taxman stand the probability of acquiring import incentives that incorporate lowered import tariffs on inputs such as equipment and uncooked products to spur manufacturing of goods for export in which the authority offers no cost VAT for its customers.
The taxman also has a provision for capital allowances on put in machinery and a attainable 20 percent export payment arrangement.
Various business alternatives
Did you know? In line with the governing administration directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, females, and people today with disabilities which are mainly MSMEs. Yet another reason why you require to register as a compact organization operator.
Unregistered enterprises must sign up as taxpayers in buy to open up doors to company prospects that can only be accessed once the organization acquires the all-crucial PIN selection.