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 economic climate nonetheless a large selection of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed very similar businesses in Kenya.
This indicates that considerably less than 27 p.c of all companies in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 p.c and .7 percent are modest and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their corporations is that they dread being subjected to high taxation that may end up ingesting on their financial gain.
On the other hand, as you will quickly explore, there are lots of positive aspects that await unregistered MSME operators as taxpayers that which includes financial loans and authorities providers.
Bid for federal government contracts
As a registered little small business operator as a taxpayer, you will be placing you in the ideal position to bid and win government tenders and trade with the government and non-government institutions.
If your company is not registered, you cannot bid for authorities contracts or even companion with other companies to acquire edge of communal benefits such as important networks, particularly with larger corporations with who they could even enter into sub-contracts.
For that reason, you will continually be locked out of handy business enterprise associations. Merely place, if an enterprise is not a taxpayer it are unable to grow!
Customized tax and customs advisory services
These are providers offered by the Kenya Earnings Authority (KRA) by way of its huge community, social media, and telephony amid others to hell MSMEs operators realize the tax and customs atmosphere in particular if they intend to get into import and export enterprise.
This is in addition to sector and networking options via its taxpayers’ roundtables that the taxman organizes to provide collectively companies for purposes of sharing challenges influencing them and receiving enterprise assistance in line with the core business of the authority.
It is throughout these meetings that the Authority avails possibilities for business owners to community and even set up new markets.
Import and export incentives
As a tiny small business operator, your goal is to increase from serving the area persons to accomplishing enterprise globally. No organization operator would their enterprise remain stagnant that’s why the require for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that incorporate reduced import tariffs on inputs these kinds of as machinery and raw components to spur producing of goods for export the place the authority delivers free of charge VAT for its customers.
The taxman also has a provision for funds allowances on mounted machinery and a probable 20 p.c export payment arrangement.
Numerous company opportunities
Did you know? In line with the govt directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, ladies, and people with disabilities which are largely MSMEs. A further rationale why you need to sign up as a modest organization operator.
Unregistered enterprises ought to sign-up as taxpayers in buy to open up doorways to small business chances that can only be accessed after the business acquires the all-important PIN amount.