In his Eighth Point out of the Country Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nonetheless a large quantity of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable corporations in Kenya.
This usually means that much less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises while only 7.1 percent and .7 per cent are tiny and medium enterprises respectively.
The cause some of the MSME operators give for not registering their organizations is that they panic being subjected to high taxation that may close up feeding on on their earnings.
Nonetheless, as you will quickly find out, there are quite a few advantages that await unregistered MSME operators as taxpayers that together with loans and authorities expert services.
Bid for governing administration contracts
As a registered smaller enterprise operator as a taxpayer, you will be placing your self in the finest place to bid and get govt tenders and trade with the authorities and non-federal government establishments.
If your enterprise is not registered, you simply cannot bid for government contracts or even spouse with other firms to take gain of communal positive aspects like important networks, especially with bigger corporations with who they could even enter into sub-contracts.
Therefore, you will continuously be locked out of valuable business associations. Just set, if an organization is not a taxpayer it cannot improve!
Personalized tax and customs advisory services
These are products and services made available by the Kenya Revenue Authority (KRA) by means of its broad network, social media, and telephony among other folks to hell MSMEs operators realize the tax and customs ecosystem in particular if they intend to get into import and export business enterprise.
This is in addition to industry and networking possibilities as a result of its taxpayers’ roundtables that the taxman organizes to bring together companies for needs of sharing problems influencing them and receiving small business information in line with the main small business of the authority.
It is during these conferences that the Authority avails opportunities for business owners to community and even set up new markets.
Import and export incentives
As a compact organization operator, your objective is to increase from serving the regional people to accomplishing company globally. No business operator would their undertaking stay stagnant for this reason the want for registration.
MSMEs registered with the taxman stand the possibility of receiving import incentives that include minimized import tariffs on inputs these kinds of as equipment and raw components to spur manufacturing of merchandise for export the place the authority offers totally free VAT for its associates.
The taxman also has a provision for money allowances on mounted machinery and a possible 20 percent export compensation arrangement.
Various enterprise prospects
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, females, and people with disabilities which are mostly MSMEs. A different reason why you need to have to sign up as a modest business operator.
Unregistered enterprises should sign-up as taxpayers in get to open up doors to organization possibilities that can only be accessed as soon as the business acquires the all-significant PIN number.