In his Eighth State of the Nation Handle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nonetheless a substantial range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed similar organizations in Kenya.
This implies that much less than 27 per cent of all companies in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises although only 7.1 % and .7 % are smaller and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their companies is that they anxiety getting subjected to higher taxation that might close up taking in on their earnings.
Nevertheless, as you will quickly find out, there are numerous benefits that await unregistered MSME operators as taxpayers that such as financial loans and govt companies.
Bid for governing administration contracts
As a registered tiny company operator as a taxpayer, you will be putting on your own in the finest position to bid and get govt tenders and trade with the government and non-govt establishments.
If your organization is not registered, you can’t bid for govt contracts or even husband or wife with other firms to consider advantage of communal added benefits including critical networks, specifically with more substantial corporations with who they could even enter into sub-contracts.
For that reason, you will constantly be locked out of valuable enterprise associations. Simply put, if an company is not a taxpayer it are unable to expand!
Personalized tax and customs advisory solutions
These are expert services presented by the Kenya Earnings Authority (KRA) by its broad network, social media, and telephony amid some others to hell MSMEs operators understand the tax and customs surroundings in particular if they intend to get into import and export company.
This is in addition to market and networking options as a result of its taxpayers’ roundtables that the taxman organizes to carry alongside one another firms for purposes of sharing troubles influencing them and getting enterprise tips in line with the main enterprise of the authority.
It is throughout these meetings that the Authority avails chances for business owners to network and even establish new markets.
Import and export incentives
As a compact small business operator, your purpose is to mature from serving the regional persons to executing business globally. No company operator would their enterprise remain stagnant hence the will need for registration.
MSMEs registered with the taxman stand the prospect of getting import incentives that involve diminished import tariffs on inputs these as equipment and raw supplies to spur production of goods for export exactly where the authority delivers free VAT for its users.
The taxman also has a provision for money allowances on set up machinery and a feasible 20 per cent export compensation arrangement.
Numerous small business opportunities
Did you know? In line with the govt directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, women, and people with disabilities which are generally MSMEs. Another purpose why you want to sign up as a compact business operator.
Unregistered enterprises should sign-up as taxpayers in get to open doorways to small business chances that can only be accessed at the time the business enterprise acquires the all-crucial PIN selection.