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, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy still a large 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 equivalent firms in Kenya.
This signifies that a lot less than 27 % of all enterprises in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 p.c and .7 % are smaller and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their corporations is that they panic becoming subjected to high taxation that may perhaps close up taking in on their earnings.
On the other hand, as you will quickly find out, there are quite a few rewards that await unregistered MSME operators as taxpayers that which include loans and authorities products and services.
Bid for governing administration contracts
As a registered small small business operator as a taxpayer, you will be putting you in the very best situation to bid and win government tenders and trade with the federal government and non-government institutions.
If your organization is not registered, you can’t bid for authorities contracts or even associate with other organizations to choose edge of communal positive aspects like crucial networks, especially with larger sized organizations with who they could even enter into sub-contracts.
Consequently, you will consistently be locked out of beneficial business enterprise associations. Simply just set, if an enterprise is not a taxpayer it can not mature!
Customized tax and customs advisory products and services
These are solutions made available by the Kenya Earnings Authority (KRA) by means of its large community, social media, and telephony between other people to hell MSMEs operators have an understanding of the tax and customs surroundings in particular if they intend to get into import and export organization.
This is in addition to current market and networking prospects through its taxpayers’ roundtables that the taxman organizes to bring collectively corporations for reasons of sharing concerns affecting them and acquiring organization assistance in line with the core organization of the authority.
It is throughout these conferences that the Authority avails alternatives for entrepreneurs to community and even set up new markets.
Import and export incentives
As a small business operator, your goal is to improve from serving the local individuals to accomplishing company globally. No small business operator would their enterprise continue to be stagnant therefore the will need for registration.
MSMEs registered with the taxman stand the likelihood of getting import incentives that include things like decreased import tariffs on inputs these as machinery and uncooked materials to spur production of items for export wherever the authority presents free VAT for its customers.
The taxman also has a provision for money allowances on installed equipment and a possible 20 p.c export payment arrangement.
Several organization chances
Did you know? In line with the governing administration directive on community procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, ladies, and people with disabilities which are largely MSMEs. An additional rationale why you have to have to sign-up as a small enterprise operator.
Unregistered enterprises really should sign-up as taxpayers in buy to open doors to small business alternatives that can only be accessed the moment the business enterprise acquires the all-critical PIN quantity.