In his Eighth State of the Country Tackle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system still a large number of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed equivalent organizations in Kenya.
This signifies that much less than 27 p.c of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 p.c and .7 percent are little and medium enterprises respectively.
The motive some of the MSME operators give for not registering their corporations is that they worry becoming subjected to higher taxation that could stop up having on their earnings.
Even so, as you will soon discover, there are many rewards that await unregistered MSME operators as taxpayers that including financial loans and government providers.
Bid for governing administration contracts
As a registered compact enterprise operator as a taxpayer, you will be putting oneself in the ideal placement to bid and gain governing administration tenders and trade with the authorities and non-governing administration institutions.
If your enterprise is not registered, you can’t bid for govt contracts or even lover with other firms to get advantage of communal rewards including essential networks, primarily with more substantial organizations with who they could even enter into sub-contracts.
As a result, you will consistently be locked out of beneficial business enterprise associations. Only set, if an company is not a taxpayer it can not increase!
Personalized tax and customs advisory products and services
These are companies provided by the Kenya Income Authority (KRA) as a result of its vast network, social media, and telephony among the many others to hell MSMEs operators comprehend the tax and customs setting especially if they intend to get into import and export organization.
This is in addition to marketplace and networking possibilities through its taxpayers’ roundtables that the taxman organizes to convey alongside one another businesses for purposes of sharing problems affecting them and obtaining enterprise information in line with the core business of the authority.
It is throughout these conferences that the Authority avails opportunities for entrepreneurs to network and even set up new marketplaces.
Import and export incentives
As a tiny small business operator, your goal is to improve from serving the neighborhood men and women to performing company globally. No business enterprise operator would their enterprise remain stagnant for this reason the need to have for registration.
MSMEs registered with the taxman stand the prospect of obtaining import incentives that consist of reduced import tariffs on inputs these as machinery and uncooked resources to spur production of items for export where the authority presents cost-free VAT for its customers.
The taxman also has a provision for funds allowances on put in equipment and a feasible 20 % export compensation arrangement.
Numerous business enterprise alternatives
Did you know? In line with the governing administration directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, gals, and persons with disabilities which are largely MSMEs. Yet another purpose why you need to sign up as a modest small business operator.
Unregistered enterprises ought to sign-up as taxpayers in order to open doors to business options that can only be accessed at the time the business enterprise acquires the all-crucial PIN selection.