In his Eighth Point out of the Country Tackle 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 still a large amount of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed very similar firms in Kenya.
This signifies that less than 27 % of all organizations in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises though only 7.1 per cent and .7 p.c are small and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their corporations is that they worry becoming subjected to superior taxation that may perhaps close up ingesting on their profit.
Nonetheless, as you will shortly find out, there are lots of benefits that await unregistered MSME operators as taxpayers that including financial loans and governing administration companies.
Bid for federal government contracts
As a registered smaller business enterprise operator as a taxpayer, you will be putting on your own in the finest posture to bid and win authorities tenders and trade with the governing administration and non-authorities establishments.
If your small business is not registered, you can not bid for federal government contracts or even lover with other corporations to just take gain of communal benefits which include essential networks, specially with much larger businesses with who they could even enter into sub-contracts.
Thus, you will repeatedly be locked out of valuable business associations. Merely place, if an enterprise is not a taxpayer it can’t increase!
Personalized tax and customs advisory expert services
These are expert services provided by the Kenya Revenue Authority (KRA) through its huge network, social media, and telephony between other folks to hell MSMEs operators realize the tax and customs surroundings particularly if they intend to get into import and export business.
This is in addition to current market and networking prospects via its taxpayers’ roundtables that the taxman organizes to bring alongside one another enterprises for needs of sharing troubles impacting them and receiving business enterprise advice in line with the main business of the authority.
It is throughout these meetings that the Authority avails alternatives for business people to network and even set up new marketplaces.
Import and export incentives
As a small small business operator, your aim is to expand from serving the community individuals to performing company globally. No enterprise operator would their enterprise keep on being stagnant hence the need for registration.
MSMEs registered with the taxman stand the chance of acquiring import incentives that include reduced import tariffs on inputs these kinds of as equipment and raw supplies to spur manufacturing of merchandise for export where the authority provides totally free VAT for its customers.
The taxman also has a provision for funds allowances on set up machinery and a doable 20 per cent export compensation arrangement.
Various business enterprise possibilities
Did you know? In line with the govt directive on community procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, ladies, and people today with disabilities which are generally MSMEs. A different rationale why you want to register as a compact organization operator.
Unregistered enterprises ought to register as taxpayers in purchase to open doors to business enterprise prospects that can only be accessed after the business acquires the all-significant PIN number.