In his Eighth Point out of the Country Deal with on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy still a big number of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed related organizations in Kenya.
This means that considerably less than 27 percent of all enterprises in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 p.c and .7 % are compact and medium enterprises respectively.
The motive some of the MSME operators give for not registering their businesses is that they fear currently being subjected to high taxation that may finish up feeding on on their revenue.
Nevertheless, as you will quickly explore, there are quite a few positive aspects that await unregistered MSME operators as taxpayers that which includes financial loans and federal government solutions.
Bid for government contracts
As a registered small business enterprise operator as a taxpayer, you will be placing on your own in the ideal placement to bid and get federal government tenders and trade with the authorities and non-authorities establishments.
If your organization is not registered, you can’t bid for govt contracts or even lover with other firms to just take edge of communal advantages which include vital networks, specially with larger organizations with who they could even enter into sub-contracts.
Consequently, you will continually be locked out of valuable company associations. Merely put, if an enterprise is not a taxpayer it can’t improve!
Individualized tax and customs advisory expert services
These are companies offered by the Kenya Earnings Authority (KRA) by way of its wide network, social media, and telephony amid others to hell MSMEs operators have an understanding of the tax and customs natural environment specially if they intend to get into import and export organization.
This is in addition to market and networking opportunities as a result of its taxpayers’ roundtables that the taxman organizes to convey collectively enterprises for uses of sharing troubles affecting them and obtaining small business suggestions in line with the main company of the authority.
It is during these conferences that the Authority avails opportunities for business people to network and even create new markets.
Import and export incentives
As a smaller small business operator, your goal is to grow from serving the local persons to accomplishing organization globally. No business operator would their undertaking stay stagnant for this reason the will need for registration.
MSMEs registered with the taxman stand the likelihood of getting import incentives that include minimized import tariffs on inputs these kinds of as equipment and raw materials to spur manufacturing of goods for export wherever the authority delivers free VAT for its members.
The taxman also has a provision for money allowances on set up machinery and a attainable 20 per cent export payment arrangement.
Many company alternatives
Did you know? In line with the federal government directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, females, and persons with disabilities which are predominantly MSMEs. One more cause why you want to register as a small business operator.
Unregistered enterprises ought to sign up as taxpayers in get to open up doorways to company options that can only be accessed the moment the business enterprise acquires the all-crucial PIN quantity.