In his Eighth Point out of the Nation Deal with on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system still a huge selection of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This indicates that fewer than 27 per cent of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 percent and .7 percent are small and medium enterprises respectively.
The motive some of the MSME operators give for not registering their businesses is that they concern becoming subjected to large taxation that may possibly stop up feeding on on their gain.
On the other hand, as you will soon find out, there are many gains that await unregistered MSME operators as taxpayers that like loans and govt providers.
Bid for federal government contracts
As a registered compact small business operator as a taxpayer, you will be placing by yourself in the best position to bid and win federal government tenders and trade with the authorities and non-governing administration institutions.
If your enterprise is not registered, you are unable to bid for govt contracts or even husband or wife with other businesses to get benefit of communal benefits which includes critical networks, primarily with larger sized firms with who they could even enter into sub-contracts.
Thus, you will constantly be locked out of practical company associations. Simply set, if an company is not a taxpayer it are not able to grow!
Individualized tax and customs advisory expert services
These are companies provided by the Kenya Profits Authority (KRA) through its large network, social media, and telephony among some others to hell MSMEs operators fully grasp the tax and customs surroundings specifically if they intend to get into import and export business enterprise.
This is in addition to current market and networking alternatives via its taxpayers’ roundtables that the taxman organizes to bring together corporations for reasons of sharing difficulties affecting them and getting enterprise information in line with the core small business of the authority.
It is through these meetings that the Authority avails prospects for business owners to network and even establish new marketplaces.
Import and export incentives
As a tiny small business operator, your goal is to develop from serving the area people today to executing small business globally. No organization operator would their enterprise remain stagnant therefore the need for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that include things like lowered import tariffs on inputs these types of as machinery and uncooked products to spur producing of products for export in which the authority delivers cost-free VAT for its customers.
The taxman also has a provision for funds allowances on mounted machinery and a achievable 20 % export payment arrangement.
Many business alternatives
Did you know? In line with the government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women of all ages, and folks with disabilities which are largely MSMEs. Another rationale why you will need to register as a little business operator.
Unregistered enterprises should really sign up as taxpayers in purchase to open doors to company possibilities that can only be accessed after the organization acquires the all-important PIN selection.