In his Eighth State of the Country Handle 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 system nevertheless a massive selection of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This implies that fewer than 27 percent of all corporations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises even though only 7.1 per cent and .7 p.c are little and medium enterprises respectively.
The reason some of the MSME operators give for not registering their companies is that they anxiety being subjected to significant taxation that may close up consuming on their gain.
On the other hand, as you will quickly learn, there are many positive aspects that await unregistered MSME operators as taxpayers that which includes financial loans and govt solutions.
Bid for govt contracts
As a registered smaller enterprise operator as a taxpayer, you will be placing by yourself in the very best place to bid and acquire govt tenders and trade with the authorities and non-federal government establishments.
If your small business is not registered, you are unable to bid for federal government contracts or even partner with other enterprises to acquire benefit of communal benefits which include essential networks, in particular with bigger firms with who they could even enter into sub-contracts.
Therefore, you will repeatedly be locked out of practical company associations. Only put, if an enterprise is not a taxpayer it are not able to expand!
Personalised tax and customs advisory products and services
These are solutions presented by the Kenya Revenue Authority (KRA) by way of its huge community, social media, and telephony among some others to hell MSMEs operators comprehend 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 prospects via its taxpayers’ roundtables that the taxman organizes to convey jointly organizations for needs of sharing concerns impacting them and receiving business enterprise advice in line with the main small business of the authority.
It is during these meetings that the Authority avails opportunities for business owners to community and even set up new markets.
Import and export incentives
As a compact small business operator, your objective is to develop from serving the area folks to executing business globally. No company operator would their enterprise stay stagnant consequently the need for registration.
MSMEs registered with the taxman stand the prospect of receiving import incentives that incorporate minimized import tariffs on inputs this kind of as equipment and uncooked supplies to spur production of products for export exactly where the authority presents free VAT for its users.
The taxman also has a provision for funds allowances on set up equipment and a doable 20 p.c export compensation arrangement.
Many organization options
Did you know? In line with the governing administration directive on general public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, gals, and men and women with disabilities which are mostly MSMEs. Yet another purpose why you have to have to sign-up as a little business enterprise operator.
Unregistered enterprises ought to sign-up as taxpayers in buy to open up doorways to business enterprise options that can only be accessed the moment the business acquires the all-important PIN quantity.