In his Eighth Condition of the Nation Deal with on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nonetheless a substantial selection of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed equivalent enterprises in Kenya.
This suggests that much less than 27 p.c of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 p.c and .7 % are small and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their enterprises is that they worry being subjected to high taxation that may well close up ingesting on their revenue.
However, as you will quickly learn, there are lots of gains that await unregistered MSME operators as taxpayers that such as financial loans and governing administration products and services.
Bid for authorities contracts
As a registered small enterprise operator as a taxpayer, you will be putting on your own in the ideal position to bid and gain government tenders and trade with the government and non-govt establishments.
If your enterprise is not registered, you simply cannot bid for federal government contracts or even partner with other enterprises to get benefit of communal benefits such as critical networks, especially with greater companies with who they could even enter into sub-contracts.
Thus, you will consistently be locked out of valuable company associations. Just put, if an organization is not a taxpayer it simply cannot develop!
Personalized tax and customs advisory providers
These are services offered by the Kenya Profits Authority (KRA) by way of its extensive community, social media, and telephony amid other folks to hell MSMEs operators have an understanding of the tax and customs environment primarily if they intend to get into import and export company.
This is in addition to marketplace and networking prospects as a result of its taxpayers’ roundtables that the taxman organizes to bring with each other businesses for uses of sharing concerns impacting them and getting small business assistance in line with the core organization of the authority.
It is in the course of these meetings that the Authority avails chances for business owners to network and even establish new markets.
Import and export incentives
As a tiny organization operator, your purpose is to mature from serving the nearby men and women to accomplishing organization globally. No company operator would their undertaking keep on being stagnant as a result the will need for registration.
MSMEs registered with the taxman stand the chance of getting import incentives that contain lowered import tariffs on inputs this sort of as equipment and uncooked supplies to spur manufacturing of merchandise for export where by the authority delivers absolutely free VAT for its customers.
The taxman also has a provision for money allowances on installed equipment and a attainable 20 % export payment arrangement.
A lot of business enterprise options
Did you know? In line with the government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, ladies, and people with disabilities which are mainly MSMEs. Yet another motive why you need to have to sign up as a small small business operator.
Unregistered enterprises should register as taxpayers in order to open doors to company opportunities that can only be accessed when the organization acquires the all-vital PIN selection.