In his Eighth State of the Country Handle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy nonetheless a big quantity of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable businesses in Kenya.
This implies that less than 27 percent of all enterprises in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 p.c and .7 percent are small and medium enterprises respectively.
The reason some of the MSME operators give for not registering their corporations is that they anxiety remaining subjected to significant taxation that might stop up feeding on on their gain.
Having said that, as you will before long uncover, there are quite a few benefits that await unregistered MSME operators as taxpayers that like loans and federal government expert services.
Bid for govt contracts
As a registered smaller small business operator as a taxpayer, you will be placing by yourself in the best place to bid and win federal government tenders and trade with the federal government and non-governing administration establishments.
If your organization is not registered, you can’t bid for authorities contracts or even lover with other organizations to acquire advantage of communal rewards which include crucial networks, specially with bigger companies with who they could even enter into sub-contracts.
Therefore, you will constantly be locked out of handy business enterprise associations. Merely set, if an company is not a taxpayer it are unable to grow!
Personalised tax and customs advisory companies
These are services made available by the Kenya Profits Authority (KRA) by way of its wide network, social media, and telephony among the some others to hell MSMEs operators fully grasp the tax and customs atmosphere specifically if they intend to get into import and export organization.
This is in addition to market place and networking chances as a result of its taxpayers’ roundtables that the taxman organizes to carry with each other corporations for purposes of sharing problems influencing them and getting company advice in line with the main small business of the authority.
It is throughout these meetings that the Authority avails options for business people to community and even build new markets.
Import and export incentives
As a small company operator, your objective is to expand from serving the regional persons to undertaking business globally. No business operator would their enterprise continue to be stagnant hence the need for registration.
MSMEs registered with the taxman stand the likelihood of acquiring import incentives that include lowered import tariffs on inputs such as machinery and uncooked products to spur production of products for export in which the authority presents free VAT for its customers.
The taxman also has a provision for cash allowances on put in equipment and a attainable 20 percent export payment arrangement.
Quite a few enterprise alternatives
Did you know? In line with the government directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, females, and folks with disabilities which are largely MSMEs. An additional rationale why you want to register as a little small business operator.
Unregistered enterprises must register as taxpayers in order to open up doorways to company alternatives that can only be accessed once the business acquires the all-important PIN quantity.
