In his Eighth Point out of the Country Handle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nonetheless a huge range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed equivalent firms in Kenya.
This means that less than 27 % of all enterprises in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 per cent and .7 % are little and medium enterprises respectively.
The motive some of the MSME operators give for not registering their companies is that they worry getting subjected to higher taxation that may perhaps close up taking in on their profit.
Having said that, as you will shortly uncover, there are many rewards that await unregistered MSME operators as taxpayers that which include loans and government expert services.
Bid for govt contracts
As a registered tiny company operator as a taxpayer, you will be putting by yourself in the greatest position to bid and get govt tenders and trade with the authorities and non-governing administration institutions.
If your business is not registered, you can’t bid for governing administration contracts or even husband or wife with other organizations to just take benefit of communal advantages together with critical networks, primarily with larger sized organizations with who they could even enter into sub-contracts.
Hence, you will continuously be locked out of handy enterprise associations. Simply just put, if an business is not a taxpayer it are not able to expand!
Personalized tax and customs advisory services
These are services presented by the Kenya Revenue Authority (KRA) via its broad community, social media, and telephony between others to hell MSMEs operators realize the tax and customs natural environment particularly if they intend to get into import and export enterprise.
This is in addition to market place and networking options via its taxpayers’ roundtables that the taxman organizes to convey collectively enterprises for functions of sharing troubles affecting them and acquiring business enterprise guidance in line with the main small business of the authority.
It is through these conferences that the Authority avails options for business people to community and even create new markets.
Import and export incentives
As a small business enterprise operator, your aim is to increase from serving the neighborhood men and women to accomplishing enterprise globally. No organization operator would their enterprise remain stagnant hence the require for registration.
MSMEs registered with the taxman stand the probability of obtaining import incentives that incorporate lowered import tariffs on inputs these types of as equipment and uncooked resources to spur production of items for export exactly where the authority delivers cost-free VAT for its users.
The taxman also has a provision for funds allowances on installed machinery and a attainable 20 % export payment arrangement.
Several company options
Did you know? In line with the govt directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, females, and individuals with disabilities which are mainly MSMEs. Another cause why you need to have to sign up as a modest organization operator.
Unregistered enterprises need to sign-up as taxpayers in order to open doorways to business alternatives that can only be accessed the moment the company acquires the all-important PIN range.