In his Eighth Point out of the Nation Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy but a massive quantity of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed identical firms in Kenya.
This indicates that fewer than 27 per cent of all organizations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises although only 7.1 percent and .7 percent are little and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their organizations is that they concern being subjected to superior taxation that could close up taking in on their earnings.
Even so, as you will soon find, there are lots of advantages that await unregistered MSME operators as taxpayers that including loans and government services.
Bid for govt contracts
As a registered small business operator as a taxpayer, you will be putting you in the best situation to bid and win federal government tenders and trade with the govt and non-government institutions.
If your business is not registered, you are unable to bid for federal government contracts or even spouse with other corporations to choose edge of communal added benefits which includes essential networks, primarily with larger sized companies with who they could even enter into sub-contracts.
Therefore, you will continually be locked out of valuable organization associations. Only set, if an company is not a taxpayer it are not able to expand!
Individualized tax and customs advisory solutions
These are expert services presented by the Kenya Income Authority (KRA) as a result of its huge community, social media, and telephony among other individuals to hell MSMEs operators have an understanding of the tax and customs setting specifically if they intend to get into import and export enterprise.
This is in addition to sector and networking possibilities as a result of its taxpayers’ roundtables that the taxman organizes to deliver with each other corporations for purposes of sharing challenges impacting them and receiving organization assistance in line with the main business enterprise of the authority.
It is during these meetings that the Authority avails opportunities for business people to network and even build new markets.
Import and export incentives
As a smaller organization operator, your aim is to grow from serving the nearby folks to doing business globally. No business enterprise operator would their venture remain stagnant as a result the will need for registration.
MSMEs registered with the taxman stand the probability of receiving import incentives that involve minimized import tariffs on inputs these kinds of as equipment and raw elements to spur production of products for export in which the authority gives no cost VAT for its customers.
The taxman also has a provision for capital allowances on set up equipment and a achievable 20 p.c export compensation arrangement.
Numerous small business opportunities
Did you know? In line with the government directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, females, and folks with disabilities which are mostly MSMEs. Another cause why you want to sign up as a compact business enterprise operator.
Unregistered enterprises need to sign-up as taxpayers in purchase to open up doorways to small business prospects that can only be accessed when the enterprise acquires the all-critical PIN number.