In his Eighth Condition of the Nation Handle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system yet a large range of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed identical corporations in Kenya.
This usually means that considerably less than 27 percent of all organizations in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises though only 7.1 p.c and .7 per cent are modest and medium enterprises respectively.
The reason some of the MSME operators give for not registering their firms is that they concern becoming subjected to significant taxation that might conclude up consuming on their earnings.
However, as you will before long find, there are numerous benefits that await unregistered MSME operators as taxpayers that together with loans and govt companies.
Bid for government contracts
As a registered little organization operator as a taxpayer, you will be putting yourself in the finest place to bid and get government tenders and trade with the authorities and non-federal government establishments.
If your enterprise is not registered, you can not bid for federal government contracts or even husband or wife with other firms to consider edge of communal rewards like crucial networks, specially with bigger firms with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of useful small business associations. Only place, if an business is not a taxpayer it are not able to grow!
Personalised tax and customs advisory products and services
These are solutions supplied by the Kenya Income Authority (KRA) as a result of its wide community, social media, and telephony among other folks to hell MSMEs operators realize the tax and customs natural environment particularly if they intend to get into import and export organization.
This is in addition to sector and networking opportunities by way of its taxpayers’ roundtables that the taxman organizes to carry alongside one another companies for uses of sharing problems influencing them and receiving small business advice in line with the core business enterprise of the authority.
It is for the duration of these conferences that the Authority avails prospects for entrepreneurs to network and even set up new markets.
Import and export incentives
As a smaller business operator, your aim is to develop from serving the neighborhood people to executing organization globally. No small business operator would their enterprise continue to be stagnant consequently the need to have for registration.
MSMEs registered with the taxman stand the prospect of obtaining import incentives that contain lessened import tariffs on inputs such as equipment and raw components to spur manufacturing of merchandise for export where by the authority provides no cost VAT for its members.
The taxman also has a provision for capital allowances on mounted machinery and a achievable 20 per cent export compensation arrangement.
A lot of small business chances
Did you know? In line with the federal government directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, girls, and people with disabilities which are generally MSMEs. An additional motive why you have to have to register as a compact business operator.
Unregistered enterprises need to sign-up as taxpayers in purchase to open up doors to company opportunities that can only be accessed the moment the organization acquires the all-crucial PIN number.