In his Eighth State of the Country Deal with on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy still a enormous number of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable firms in Kenya.
This usually means that less than 27 % of all firms in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 p.c and .7 p.c are smaller and medium enterprises respectively.
The reason some of the MSME operators give for not registering their companies is that they worry currently being subjected to substantial taxation that may perhaps end up having on their revenue.
Even so, as you will before long find, there are numerous benefits that await unregistered MSME operators as taxpayers that like financial loans and governing administration solutions.
Bid for government contracts
As a registered smaller small business operator as a taxpayer, you will be placing yourself in the most effective position to bid and gain government tenders and trade with the governing administration and non-govt institutions.
If your small business is not registered, you are not able to bid for authorities contracts or even spouse with other firms to just take advantage of communal advantages which include important networks, in particular with more substantial firms with who they could even enter into sub-contracts.
Thus, you will continually be locked out of helpful business enterprise associations. Merely put, if an organization is not a taxpayer it can’t develop!
Customized tax and customs advisory solutions
These are providers provided by the Kenya Earnings Authority (KRA) by its vast network, social media, and telephony among other folks to hell MSMEs operators fully grasp the tax and customs setting specially if they intend to get into import and export small business.
This is in addition to marketplace and networking prospects by way of its taxpayers’ roundtables that the taxman organizes to carry jointly enterprises for uses of sharing troubles impacting them and obtaining company advice in line with the main company of the authority.
It is all through these conferences that the Authority avails alternatives for business owners to community and even set up new markets.
Import and export incentives
As a compact enterprise operator, your target is to mature from serving the nearby persons to carrying out organization globally. No enterprise operator would their enterprise continue to be stagnant for this reason the want for registration.
MSMEs registered with the taxman stand the possibility of getting import incentives that consist of minimized import tariffs on inputs this kind of as equipment and uncooked supplies to spur production of items for export where by the authority provides no cost VAT for its members.
The taxman also has a provision for funds allowances on mounted machinery and a feasible 20 p.c export payment arrangement.
Many enterprise chances
Did you know? In line with the federal government directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, gals, and folks with disabilities which are generally MSMEs. A further purpose why you want to sign-up as a smaller organization operator.
Unregistered enterprises should register as taxpayers in purchase to open doors to business enterprise chances that can only be accessed the moment the business enterprise acquires the all-crucial PIN amount.
