In his Eighth State of the Country Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system but a massive 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 firms in Kenya.
This means that significantly less than 27 percent of all organizations in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 per cent and .7 per cent are small and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their businesses is that they panic currently being subjected to large taxation that might end up feeding on on their financial gain.
However, as you will before long discover, there are a lot of added benefits that await unregistered MSME operators as taxpayers that which include financial loans and government companies.
Bid for government contracts
As a registered smaller business operator as a taxpayer, you will be putting your self in the very best position to bid and win govt tenders and trade with the govt and non-federal government establishments.
If your company is not registered, you simply cannot bid for government contracts or even lover with other enterprises to acquire benefit of communal positive aspects such as crucial networks, specially with more substantial corporations with who they could even enter into sub-contracts.
Therefore, you will consistently be locked out of helpful company associations. Just set, if an company is not a taxpayer it are unable to mature!
Personalized tax and customs advisory providers
These are expert services offered by the Kenya Income Authority (KRA) as a result of its large community, social media, and telephony between many others to hell MSMEs operators recognize the tax and customs natural environment especially if they intend to get into import and export business enterprise.
This is in addition to market place and networking options by means of its taxpayers’ roundtables that the taxman organizes to convey together firms for uses of sharing difficulties affecting them and obtaining business enterprise tips in line with the core business of the authority.
It is in the course of these conferences that the Authority avails alternatives for entrepreneurs to community and even establish new markets.
Import and export incentives
As a little small business operator, your intention is to grow from serving the local persons to carrying out organization globally. No enterprise operator would their enterprise continue to be stagnant as a result the want for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that include things like reduced import tariffs on inputs such as equipment and raw materials to spur production of goods for export where the authority delivers no cost VAT for its users.
The taxman also has a provision for money allowances on set up machinery and a attainable 20 per cent export compensation arrangement.
Several organization alternatives
Did you know? In line with the govt directive on community procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, ladies, and individuals with disabilities which are mostly MSMEs. A further explanation why you require to sign-up as a modest organization operator.
Unregistered enterprises should sign up as taxpayers in order to open doorways to business alternatives that can only be accessed as soon as the organization acquires the all-essential PIN selection.