In his Eighth State of the Nation Handle 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 economy nevertheless a enormous number of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed identical enterprises in Kenya.
This implies that considerably less than 27 p.c of all corporations in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 % and .7 % are smaller and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their enterprises is that they worry currently being subjected to higher taxation that might close up feeding on on their earnings.
On the other hand, as you will shortly explore, there are several rewards that await unregistered MSME operators as taxpayers that which include loans and authorities providers.
Bid for governing administration contracts
As a registered little organization operator as a taxpayer, you will be putting yourself in the ideal position to bid and earn authorities tenders and trade with the government and non-federal government institutions.
If your business is not registered, you can’t bid for federal government contracts or even companion with other businesses to take edge of communal positive aspects including critical networks, specially with more substantial businesses with who they could even enter into sub-contracts.
As a result, you will constantly be locked out of valuable company associations. Only place, if an company is not a taxpayer it can’t mature!
Personalised tax and customs advisory products and services
These are expert services made available by the Kenya Income Authority (KRA) through its broad network, social media, and telephony amid others to hell MSMEs operators understand the tax and customs surroundings particularly if they intend to get into import and export organization.
This is in addition to marketplace and networking alternatives by means of its taxpayers’ roundtables that the taxman organizes to provide with each other corporations for applications of sharing concerns impacting them and receiving business enterprise information in line with the core small business of the authority.
It is all through these meetings that the Authority avails opportunities for entrepreneurs to network and even set up new markets.
Import and export incentives
As a little small business operator, your goal is to increase from serving the community people today to executing small business globally. No small business operator would their undertaking remain stagnant consequently the need for registration.
MSMEs registered with the taxman stand the chance of receiving import incentives that contain decreased import tariffs on inputs these kinds of as equipment and uncooked materials to spur production of goods for export where by the authority provides cost-free VAT for its associates.
The taxman also has a provision for money allowances on put in equipment and a attainable 20 % export compensation arrangement.
A lot of enterprise options
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 run by the youth, gals, and persons with disabilities which are mostly MSMEs. Another rationale why you want to sign-up as a smaller organization operator.
Unregistered enterprises should sign up as taxpayers in order to open up doors to business opportunities that can only be accessed at the time the business enterprise acquires the all-vital PIN amount.