In his Eighth Condition of the Country Deal with on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate nonetheless a big quantity of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed similar enterprises in Kenya.
This implies that fewer than 27 % of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises though only 7.1 percent and .7 percent are smaller and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their businesses is that they anxiety being subjected to large taxation that might close up consuming on their profit.
However, as you will before long find out, there are quite a few rewards that await unregistered MSME operators as taxpayers that such as financial loans and authorities providers.
Bid for federal government contracts
As a registered little small business operator as a taxpayer, you will be placing by yourself in the very best posture to bid and win govt tenders and trade with the authorities and non-federal government establishments.
If your enterprise is not registered, you cannot bid for govt contracts or even associate with other companies to get advantage of communal gains like essential networks, particularly with more substantial organizations with who they could even enter into sub-contracts.
Therefore, you will continuously be locked out of useful organization associations. Simply just put, if an enterprise is not a taxpayer it can’t grow!
Individualized tax and customs advisory expert services
These are products and services made available by the Kenya Income Authority (KRA) by way of its large network, social media, and telephony amongst others to hell MSMEs operators comprehend the tax and customs environment specially if they intend to get into import and export company.
This is in addition to sector and networking alternatives via its taxpayers’ roundtables that the taxman organizes to deliver together firms for functions of sharing troubles impacting them and obtaining small business information in line with the core small business of the authority.
It is through these conferences that the Authority avails alternatives for entrepreneurs to network and even set up new markets.
Import and export incentives
As a small small business operator, your intention is to increase from serving the community persons to executing small business globally. No enterprise operator would their undertaking continue being stagnant that’s why the have to have for registration.
MSMEs registered with the taxman stand the prospect of obtaining import incentives that involve lowered import tariffs on inputs such as equipment and raw components to spur manufacturing of merchandise for export where the authority presents cost-free VAT for its members.
The taxman also has a provision for capital allowances on put in equipment and a feasible 20 per cent export compensation arrangement.
Quite a few organization options
Did you know? In line with the federal government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, ladies, and folks with disabilities which are generally MSMEs. Yet another reason why you need to have to register as a compact company operator.
Unregistered enterprises must register as taxpayers in order to open up doors to organization chances that can only be accessed once the enterprise acquires the all-crucial PIN quantity.