In his Eighth Point out of the Nation Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy but a substantial number of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This implies that fewer than 27 % of all firms in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises whilst only 7.1 per cent and .7 per cent are tiny and medium enterprises respectively.
The reason some of the MSME operators give for not registering their companies is that they fear currently being subjected to superior taxation that may well end up having on their revenue.
Nevertheless, as you will quickly find, there are many rewards that await unregistered MSME operators as taxpayers that which include financial loans and govt providers.
Bid for governing administration contracts
As a registered compact business operator as a taxpayer, you will be placing by yourself in the most effective place to bid and acquire federal government tenders and trade with the federal government and non-authorities establishments.
If your business enterprise is not registered, you are unable to bid for governing administration contracts or even spouse with other corporations to consider gain of communal gains such as important networks, especially with much larger firms with who they could even enter into sub-contracts.
Thus, you will continually be locked out of beneficial organization associations. Only place, if an organization is not a taxpayer it cannot improve!
Personalized tax and customs advisory services
These are companies supplied by the Kenya Earnings Authority (KRA) by means of its vast community, social media, and telephony among the many others to hell MSMEs operators have an understanding of the tax and customs ecosystem specially if they intend to get into import and export business enterprise.
This is in addition to current market and networking possibilities by its taxpayers’ roundtables that the taxman organizes to provide alongside one another organizations for needs of sharing concerns affecting them and acquiring company advice in line with the main business enterprise of the authority.
It is throughout these conferences that the Authority avails opportunities for business owners to network and even set up new marketplaces.
Import and export incentives
As a smaller business enterprise operator, your purpose is to develop from serving the nearby folks to executing enterprise globally. No business enterprise operator would their enterprise continue being stagnant for this reason the will need for registration.
MSMEs registered with the taxman stand the opportunity of getting import incentives that include things like decreased import tariffs on inputs these as machinery and uncooked elements to spur production of goods for export in which the authority delivers cost-free VAT for its members.
The taxman also has a provision for capital allowances on put in machinery and a doable 20 % export payment arrangement.
Various business enterprise prospects
Did you know? In line with the federal government directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, ladies, and individuals with disabilities which are mostly MSMEs. A further reason why you need to sign-up as a little company operator.
Unregistered enterprises must sign-up as taxpayers in get to open up doors to organization opportunities that can only be accessed after the business acquires the all-crucial PIN amount.