In his Eighth Point out of the Nation Tackle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nevertheless a huge selection of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed similar organizations in Kenya.
This implies that less than 27 p.c of all businesses in Kenya are registered. Out of these, 92.2 % are micro-enterprises while only 7.1 % and .7 percent are modest and medium enterprises respectively.
The motive some of the MSME operators give for not registering their companies is that they panic remaining subjected to high taxation that may conclusion up consuming on their financial gain.
Nevertheless, as you will quickly discover, there are quite a few added benefits that await unregistered MSME operators as taxpayers that including financial loans and govt expert services.
Bid for govt contracts
As a registered small business operator as a taxpayer, you will be placing your self in the most effective place to bid and earn govt tenders and trade with the government and non-government institutions.
If your small business is not registered, you are unable to bid for governing administration contracts or even spouse with other corporations to acquire benefit of communal added benefits like important networks, especially with larger sized providers with who they could even enter into sub-contracts.
For that reason, you will repeatedly be locked out of beneficial business associations. Simply put, if an enterprise is not a taxpayer it cannot increase!
Customized tax and customs advisory providers
These are expert services offered by the Kenya Income Authority (KRA) by way of its wide community, social media, and telephony among the other folks to hell MSMEs operators realize the tax and customs natural environment particularly if they intend to get into import and export enterprise.
This is in addition to market and networking alternatives by means of its taxpayers’ roundtables that the taxman organizes to deliver together firms for needs of sharing concerns influencing them and obtaining enterprise assistance in line with the core small business of the authority.
It is through these conferences that the Authority avails possibilities for business people to community and even build new markets.
Import and export incentives
As a tiny business enterprise operator, your target is to grow from serving the regional people to undertaking company globally. No organization operator would their venture continue to be stagnant as a result the need for registration.
MSMEs registered with the taxman stand the possibility of receiving import incentives that involve diminished import tariffs on inputs such as equipment and uncooked elements to spur manufacturing of goods for export the place the authority offers cost-free VAT for its associates.
The taxman also has a provision for money allowances on mounted machinery and a possible 20 % export compensation arrangement.
Many company options
Did you know? In line with the authorities directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, gals, and folks with disabilities which are mostly MSMEs. A different cause why you need to register as a smaller business enterprise operator.
Unregistered enterprises should sign-up as taxpayers in get to open doors to small business possibilities that can only be accessed the moment the company acquires the all-significant PIN selection.