In his Eighth Condition of the Country Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system yet a large variety of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related firms in Kenya.
This signifies that less than 27 percent of all corporations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises even though only 7.1 % and .7 p.c are modest and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their businesses is that they dread currently being subjected to significant taxation that could close up eating on their earnings.
However, as you will soon explore, there are lots of rewards that await unregistered MSME operators as taxpayers that like loans and governing administration products and services.
Bid for federal government contracts
As a registered little company operator as a taxpayer, you will be placing oneself in the ideal placement to bid and win govt tenders and trade with the authorities and non-govt institutions.
If your company is not registered, you can’t bid for governing administration contracts or even companion with other enterprises to take advantage of communal benefits together with critical networks, especially with more substantial businesses with who they could even enter into sub-contracts.
For that reason, you will constantly be locked out of useful enterprise associations. Merely place, if an organization is not a taxpayer it are unable to grow!
Individualized tax and customs advisory companies
These are solutions supplied by the Kenya Profits Authority (KRA) as a result of its wide community, social media, and telephony among many others to hell MSMEs operators comprehend the tax and customs natural environment specially if they intend to get into import and export business.
This is in addition to marketplace and networking alternatives by its taxpayers’ roundtables that the taxman organizes to convey with each other organizations for applications of sharing troubles influencing them and receiving business information in line with the main small business of the authority.
It is through these meetings that the Authority avails alternatives for business owners to network and even build new marketplaces.
Import and export incentives
As a little company operator, your purpose is to mature from serving the area individuals to performing business enterprise globally. No business operator would their enterprise keep on being stagnant consequently the want for registration.
MSMEs registered with the taxman stand the possibility of receiving import incentives that contain diminished import tariffs on inputs this sort of as machinery and uncooked supplies to spur production of items for export in which the authority gives absolutely free VAT for its users.
The taxman also has a provision for cash allowances on set up machinery and a possible 20 percent export payment arrangement.
Many business enterprise alternatives
Did you know? In line with the governing administration directive on public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women of all ages, and people today with disabilities which are predominantly MSMEs. A further purpose why you will need to register as a compact company operator.
Unregistered enterprises should sign-up as taxpayers in purchase to open up doorways to company opportunities that can only be accessed after the business enterprise acquires the all-significant PIN amount.