In his Eighth Condition of the Country Address on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nonetheless a big variety of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed similar companies in Kenya.
This usually means that less than 27 p.c of all businesses in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 % and .7 p.c are smaller and medium enterprises respectively.
The cause some of the MSME operators give for not registering their organizations is that they dread getting subjected to high taxation that may perhaps conclusion up feeding on on their gain.
Nevertheless, as you will quickly learn, there are numerous advantages that await unregistered MSME operators as taxpayers that which include loans and federal government solutions.
Bid for government contracts
As a registered small enterprise operator as a taxpayer, you will be putting your self in the ideal place to bid and acquire federal government tenders and trade with the governing administration and non-authorities establishments.
If your company is not registered, you can’t bid for governing administration contracts or even associate with other corporations to acquire benefit of communal rewards including vital networks, especially with greater organizations with who they could even enter into sub-contracts.
For that reason, you will repeatedly be locked out of handy small business associations. Only place, if an enterprise is not a taxpayer it are not able to grow!
Individualized tax and customs advisory companies
These are products and services available by the Kenya Revenue Authority (KRA) via its wide network, social media, and telephony among many others to hell MSMEs operators fully grasp the tax and customs natural environment primarily if they intend to get into import and export company.
This is in addition to market and networking options through its taxpayers’ roundtables that the taxman organizes to bring with each other enterprises for needs of sharing problems impacting them and receiving enterprise information in line with the core small business of the authority.
It is through these conferences that the Authority avails prospects for entrepreneurs to community and even create new marketplaces.
Import and export incentives
As a compact company operator, your intention is to increase from serving the area folks to carrying out business enterprise globally. No enterprise operator would their undertaking continue to be stagnant hence the have to have for registration.
MSMEs registered with the taxman stand the probability of getting import incentives that incorporate lessened import tariffs on inputs these types of as machinery and raw components to spur producing of merchandise for export in which the authority gives totally free VAT for its users.
The taxman also has a provision for money allowances on installed equipment and a feasible 20 % export compensation arrangement.
Various business enterprise prospects
Did you know? In line with the govt directive on community procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, girls, and folks with disabilities which are mostly MSMEs. An additional rationale why you require to register as a little business enterprise operator.
Unregistered enterprises should really sign up as taxpayers in buy to open up doorways to small business alternatives that can only be accessed as soon as the organization acquires the all-vital PIN range.