In his Eighth Point out of the Country Address on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate but a large variety of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This usually means that considerably less than 27 percent of all firms in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 % and .7 percent are small and medium enterprises respectively.
The motive some of the MSME operators give for not registering their enterprises is that they fear remaining subjected to high taxation that could close up ingesting on their revenue.
Even so, as you will soon uncover, there are several positive aspects that await unregistered MSME operators as taxpayers that which include loans and governing administration providers.
Bid for govt contracts
As a registered small enterprise operator as a taxpayer, you will be placing by yourself in the very best place to bid and gain govt tenders and trade with the authorities and non-govt institutions.
If your enterprise is not registered, you can’t bid for governing administration contracts or even associate with other corporations to take benefit of communal gains including essential networks, specially with more substantial organizations with who they could even enter into sub-contracts.
Thus, you will consistently be locked out of beneficial organization associations. Basically put, if an company is not a taxpayer it are unable to expand!
Personalized tax and customs advisory solutions
These are products and services provided by the Kenya Profits Authority (KRA) through its wide community, social media, and telephony among the others to hell MSMEs operators recognize the tax and customs surroundings specially if they intend to get into import and export business enterprise.
This is in addition to current market and networking prospects by means of its taxpayers’ roundtables that the taxman organizes to carry together corporations for reasons of sharing concerns affecting them and receiving business assistance in line with the core business enterprise of the authority.
It is throughout these conferences that the Authority avails opportunities for entrepreneurs to network and even set up new marketplaces.
Import and export incentives
As a smaller company operator, your objective is to develop from serving the nearby individuals to undertaking business enterprise globally. No business operator would their venture stay stagnant therefore the need to have for registration.
MSMEs registered with the taxman stand the opportunity of getting import incentives that involve minimized import tariffs on inputs these kinds of as equipment and raw supplies to spur manufacturing of goods for export where the authority provides free of charge VAT for its users.
The taxman also has a provision for money allowances on set up machinery and a feasible 20 p.c export compensation arrangement.
Numerous enterprise prospects
Did you know? In line with the federal government directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, ladies, and men and women with disabilities which are predominantly MSMEs. A different purpose why you need to have to sign up as a tiny company operator.
Unregistered enterprises should really sign-up as taxpayers in order to open doors to business possibilities that can only be accessed the moment the enterprise acquires the all-significant PIN quantity.