In his Eighth Point out of the Country Handle 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 state however a substantial amount of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed very similar businesses in Kenya.
This usually means that much less than 27 p.c of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 per cent and .7 per cent are tiny and medium enterprises respectively.
The motive some of the MSME operators give for not registering their companies is that they dread becoming subjected to significant taxation that might close up feeding on on their gain.
Nevertheless, as you will before long explore, there are lots of advantages that await unregistered MSME operators as taxpayers that such as loans and government expert services.
Bid for government contracts
As a registered compact business operator as a taxpayer, you will be putting you in the ideal situation to bid and get federal government tenders and trade with the govt and non-government institutions.
If your organization is not registered, you cannot bid for authorities contracts or even lover with other enterprises to take advantage of communal advantages like vital networks, particularly with larger providers with who they could even enter into sub-contracts.
Consequently, you will consistently be locked out of beneficial enterprise associations. Basically put, if an company is not a taxpayer it simply cannot grow!
Individualized tax and customs advisory expert services
These are solutions presented by the Kenya Revenue Authority (KRA) via its wide network, social media, and telephony among the other people to hell MSMEs operators understand the tax and customs natural environment in particular if they intend to get into import and export small business.
This is in addition to sector and networking possibilities by way of its taxpayers’ roundtables that the taxman organizes to carry jointly companies for needs of sharing challenges influencing them and getting enterprise information in line with the main company of the authority.
It is for the duration of these meetings that the Authority avails opportunities for business people to network and even build new markets.
Import and export incentives
As a smaller business enterprise operator, your purpose is to increase from serving the nearby persons to undertaking business globally. No business operator would their venture stay stagnant hence the will need for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that include diminished import tariffs on inputs these as machinery and raw elements to spur manufacturing of items for export in which the authority gives no cost VAT for its customers.
The taxman also has a provision for money allowances on put in equipment and a possible 20 percent export payment arrangement.
Several small business options
Did you know? In line with the authorities directive on public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and individuals with disabilities which are primarily MSMEs. A different purpose why you have to have to sign-up as a modest small business operator.
Unregistered enterprises really should sign up as taxpayers in purchase to open doors to organization chances that can only be accessed once the enterprise acquires the all-important PIN selection.