In his Eighth Condition of the Nation 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 economic system yet a big quantity of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed similar businesses in Kenya.
This indicates that a lot less than 27 percent of all firms in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 per cent and .7 per cent are smaller and medium enterprises respectively.
The cause some of the MSME operators give for not registering their corporations is that they anxiety becoming subjected to high taxation that could conclude up eating on their gain.
Having said that, as you will shortly find, there are many advantages that await unregistered MSME operators as taxpayers that like loans and govt services.
Bid for govt contracts
As a registered little enterprise operator as a taxpayer, you will be placing you in the finest placement to bid and acquire govt tenders and trade with the federal government and non-governing administration institutions.
If your company is not registered, you are unable to bid for authorities contracts or even spouse with other enterprises to just take gain of communal positive aspects which includes essential networks, particularly with larger sized providers with who they could even enter into sub-contracts.
Therefore, you will constantly be locked out of helpful organization associations. Simply put, if an company is not a taxpayer it can’t improve!
Personalized tax and customs advisory solutions
These are solutions available by the Kenya Profits Authority (KRA) by means of its extensive community, social media, and telephony between other individuals to hell MSMEs operators comprehend the tax and customs environment specifically if they intend to get into import and export company.
This is in addition to current market and networking chances via its taxpayers’ roundtables that the taxman organizes to carry jointly firms for uses of sharing concerns affecting them and getting company information in line with the main business enterprise of the authority.
It is all through these conferences that the Authority avails alternatives for entrepreneurs to network and even build new markets.
Import and export incentives
As a small business operator, your purpose is to grow from serving the local people today to executing organization globally. No business enterprise operator would their enterprise keep on being stagnant therefore the want for registration.
MSMEs registered with the taxman stand the opportunity of getting import incentives that include decreased import tariffs on inputs these types of as equipment and raw resources to spur manufacturing of goods for export the place the authority gives cost-free VAT for its associates.
The taxman also has a provision for capital allowances on mounted machinery and a doable 20 % export compensation arrangement.
Numerous business prospects
Did you know? In line with the government directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, women, and persons with disabilities which are generally MSMEs. A different motive why you need to register as a compact business operator.
Unregistered enterprises really should sign up as taxpayers in order to open up doorways to small business alternatives that can only be accessed as soon as the business acquires the all-crucial PIN number.