In his Eighth State of the Country Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nevertheless a substantial quantity of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This indicates that much less than 27 percent of all enterprises in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises though only 7.1 % and .7 per cent are modest and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their firms is that they panic getting subjected to high taxation that may perhaps close up ingesting on their income.
Nonetheless, as you will quickly discover, there are lots of positive aspects that await unregistered MSME operators as taxpayers that including financial loans and authorities products and services.
Bid for government contracts
As a registered compact business operator as a taxpayer, you will be putting your self in the very best place to bid and win government tenders and trade with the federal government and non-federal government institutions.
If your business enterprise is not registered, you can’t bid for authorities contracts or even associate with other companies to just take advantage of communal gains like critical networks, primarily with larger sized businesses with who they could even enter into sub-contracts.
For that reason, you will continuously be locked out of handy small business associations. Simply put, if an organization is not a taxpayer it are unable to expand!
Customized tax and customs advisory services
These are services provided by the Kenya Revenue Authority (KRA) as a result of its vast network, social media, and telephony among the others to hell MSMEs operators recognize the tax and customs setting especially if they intend to get into import and export small business.
This is in addition to industry and networking chances through its taxpayers’ roundtables that the taxman organizes to deliver collectively companies for functions of sharing issues impacting them and getting business assistance in line with the core business enterprise of the authority.
It is for the duration of these conferences that the Authority avails opportunities for business people to community and even build new marketplaces.
Import and export incentives
As a small company operator, your goal is to expand from serving the nearby individuals to doing business globally. No enterprise operator would their venture stay stagnant for this reason the require for registration.
MSMEs registered with the taxman stand the probability of getting import incentives that incorporate decreased import tariffs on inputs these as equipment and raw elements to spur producing of items for export exactly where the authority features cost-free VAT for its associates.
The taxman also has a provision for cash allowances on mounted equipment and a possible 20 percent export compensation arrangement.
Several business enterprise possibilities
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, females, and persons with disabilities which are predominantly MSMEs. One more reason why you want to sign-up as a small business enterprise operator.
Unregistered enterprises need to sign up as taxpayers in get to open doors to small business alternatives that can only be accessed the moment the small business acquires the all-vital PIN variety.
