In his Eighth Condition of the Nation Address on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nevertheless a massive selection of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed very similar organizations in Kenya.
This usually means that considerably less than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 % are micro-enterprises while only 7.1 % and .7 percent are compact and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their businesses is that they fear getting subjected to superior taxation that may stop up feeding on on their income.
On the other hand, as you will shortly learn, there are a lot of positive aspects that await unregistered MSME operators as taxpayers that like loans and governing administration providers.
Bid for govt contracts
As a registered tiny company operator as a taxpayer, you will be putting your self in the best situation to bid and gain governing administration tenders and trade with the governing administration and non-authorities institutions.
If your enterprise is not registered, you are not able to bid for governing administration contracts or even lover with other corporations to get advantage of communal gains which include crucial networks, specially with bigger providers with who they could even enter into sub-contracts.
Therefore, you will constantly be locked out of beneficial business associations. Merely put, if an company is not a taxpayer it are unable to grow!
Individualized tax and customs advisory expert services
These are products and services offered by the Kenya Profits Authority (KRA) by its wide network, social media, and telephony among others to hell MSMEs operators realize the tax and customs natural environment specially if they intend to get into import and export small business.
This is in addition to current market and networking options through its taxpayers’ roundtables that the taxman organizes to convey with each other enterprises for needs of sharing issues impacting them and obtaining business suggestions in line with the core company of the authority.
It is through these meetings that the Authority avails prospects for entrepreneurs to community and even set up new marketplaces.
Import and export incentives
As a modest organization operator, your intention is to increase from serving the area people to accomplishing enterprise globally. No enterprise operator would their undertaking continue to be stagnant consequently the need to have for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that include things like lessened import tariffs on inputs these types of as equipment and uncooked products to spur producing of goods for export wherever the authority offers totally free VAT for its users.
The taxman also has a provision for funds allowances on set up machinery and a probable 20 % export payment arrangement.
Various business prospects
Did you know? In line with the govt directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and people today with disabilities which are mostly MSMEs. One more rationale why you need to register as a small company operator.
Unregistered enterprises really should register as taxpayers in purchase to open up doorways to organization alternatives that can only be accessed at the time the small business acquires the all-critical PIN variety.