In his Eighth Condition of the Country Handle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy however a substantial number of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed equivalent corporations in Kenya.
This implies that a lot less than 27 per cent of all enterprises in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises even though only 7.1 % and .7 per cent are smaller and medium enterprises respectively.
The motive some of the MSME operators give for not registering their businesses is that they concern remaining subjected to significant taxation that could finish up ingesting on their gain.
However, as you will quickly learn, there are several positive aspects that await unregistered MSME operators as taxpayers that like financial loans and govt services.
Bid for government contracts
As a registered smaller enterprise operator as a taxpayer, you will be placing by yourself in the greatest place to bid and earn governing administration tenders and trade with the government and non-governing administration establishments.
If your company is not registered, you are not able to bid for governing administration contracts or even associate with other companies to get benefit of communal advantages which include vital networks, especially with larger organizations with who they could even enter into sub-contracts.
Thus, you will constantly be locked out of practical company associations. Basically put, if an business is not a taxpayer it simply cannot increase!
Customized tax and customs advisory solutions
These are products and services available by the Kenya Income Authority (KRA) through its vast community, social media, and telephony amongst other people to hell MSMEs operators have an understanding of the tax and customs ecosystem in particular if they intend to get into import and export enterprise.
This is in addition to market and networking prospects through its taxpayers’ roundtables that the taxman organizes to provide alongside one another enterprises for applications of sharing issues influencing them and acquiring business enterprise tips in line with the core enterprise of the authority.
It is throughout these meetings that the Authority avails prospects for business people to community and even build new markets.
Import and export incentives
As a small organization operator, your aim is to expand from serving the area people to performing small business globally. No business enterprise operator would their undertaking stay stagnant for this reason the need to have for registration.
MSMEs registered with the taxman stand the probability of receiving import incentives that incorporate lowered import tariffs on inputs this kind of as equipment and uncooked supplies to spur manufacturing of merchandise for export exactly where the authority delivers absolutely free VAT for its users.
The taxman also has a provision for funds allowances on put in equipment and a probable 20 percent export payment arrangement.
Numerous enterprise chances
Did you know? In line with the governing administration directive on community procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, ladies, and folks with disabilities which are primarily MSMEs. A different motive why you have to have to sign up as a compact business operator.
Unregistered enterprises really should register as taxpayers in buy to open up doors to enterprise options that can only be accessed the moment the small business acquires the all-critical PIN range.