In his Eighth Condition of the Nation Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate but a huge amount 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 usually means that fewer than 27 per cent of all companies in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises although only 7.1 p.c and .7 % are compact and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their enterprises is that they dread getting subjected to large taxation that may conclusion up consuming on their profit.
Having said that, as you will shortly learn, there are many benefits that await unregistered MSME operators as taxpayers that which include loans and government expert services.
Bid for govt contracts
As a registered modest business operator as a taxpayer, you will be putting your self in the finest placement to bid and win federal government tenders and trade with the govt and non-governing administration establishments.
If your company is not registered, you simply cannot bid for governing administration contracts or even husband or wife with other businesses to just take advantage of communal advantages which includes vital networks, in particular with bigger corporations with who they could even enter into sub-contracts.
For that reason, you will continually be locked out of helpful business enterprise associations. Only set, if an business is not a taxpayer it are unable to grow!
Customized tax and customs advisory expert services
These are products and services made available by the Kenya Earnings Authority (KRA) by its huge network, social media, and telephony among other individuals to hell MSMEs operators realize the tax and customs environment specifically if they intend to get into import and export small business.
This is in addition to market and networking opportunities by way of its taxpayers’ roundtables that the taxman organizes to bring together organizations for reasons of sharing challenges affecting them and acquiring organization advice in line with the core organization of the authority.
It is during these meetings that the Authority avails options for business owners to community and even build new marketplaces.
Import and export incentives
As a small business enterprise operator, your objective is to improve from serving the community folks to undertaking company globally. No company operator would their undertaking continue to be stagnant hence the need for registration.
MSMEs registered with the taxman stand the possibility of getting import incentives that contain lowered import tariffs on inputs these types of as machinery and raw supplies to spur manufacturing of products for export wherever the authority features cost-free VAT for its members.
The taxman also has a provision for cash allowances on set up machinery and a probable 20 p.c export payment arrangement.
Quite a few business opportunities
Did you know? In line with the authorities directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, females, and people with disabilities which are mostly MSMEs. One more motive why you have to have to register as a small small business operator.
Unregistered enterprises should sign up as taxpayers in purchase to open up doors to organization alternatives that can only be accessed when the company acquires the all-critical PIN range.