In his Eighth State of the Nation Handle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system nonetheless a large 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 similar organizations in Kenya.
This means that fewer than 27 per cent of all businesses in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 p.c and .7 p.c are little and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their enterprises is that they panic becoming subjected to higher taxation that may close up feeding on on their financial gain.
On the other hand, as you will shortly learn, there are a lot of added benefits that await unregistered MSME operators as taxpayers that including financial loans and governing administration solutions.
Bid for federal government contracts
As a registered modest organization operator as a taxpayer, you will be placing on your own in the greatest posture to bid and acquire federal government tenders and trade with the federal government and non-govt institutions.
If your small business is not registered, you can’t bid for govt contracts or even partner with other corporations to acquire gain of communal gains such as crucial networks, in particular with larger firms with who they could even enter into sub-contracts.
Hence, you will continually be locked out of beneficial business associations. Simply set, if an business is not a taxpayer it can not grow!
Customized tax and customs advisory providers
These are services provided by the Kenya Income Authority (KRA) by its vast network, social media, and telephony amongst others to hell MSMEs operators recognize the tax and customs environment primarily if they intend to get into import and export organization.
This is in addition to industry and networking opportunities via its taxpayers’ roundtables that the taxman organizes to deliver collectively organizations for applications of sharing troubles influencing them and getting business tips in line with the main organization of the authority.
It is all through these meetings that the Authority avails alternatives for business people to network and even create new markets.
Import and export incentives
As a modest small business operator, your target is to mature from serving the regional folks to executing business enterprise globally. No business operator would their venture remain stagnant hence the need for registration.
MSMEs registered with the taxman stand the likelihood of acquiring import incentives that incorporate decreased import tariffs on inputs these as machinery and raw products to spur manufacturing of goods for export wherever the authority provides cost-free VAT for its members.
The taxman also has a provision for cash allowances on mounted equipment and a probable 20 per cent export compensation arrangement.
Quite a few organization chances
Did you know? In line with the govt directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, gals, and people today with disabilities which are primarily MSMEs. A different rationale why you will need to sign up as a little organization operator.
Unregistered enterprises ought to register as taxpayers in order to open up doors to small business chances that can only be accessed as soon as the business acquires the all-critical PIN variety.