In his Eighth Point out of the Nation Tackle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system yet a massive variety of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed similar companies in Kenya.
This suggests that fewer than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 % are micro-enterprises when only 7.1 p.c and .7 per cent are tiny and medium enterprises respectively.
The cause some of the MSME operators give for not registering their organizations is that they worry currently being subjected to higher taxation that may well end up feeding on on their financial gain.
However, as you will shortly explore, there are numerous benefits that await unregistered MSME operators as taxpayers that which includes financial loans and government services.
Bid for govt contracts
As a registered small enterprise operator as a taxpayer, you will be putting you in the very best posture to bid and get govt tenders and trade with the government and non-govt institutions.
If your organization is not registered, you are unable to bid for government contracts or even spouse with other organizations to get gain of communal rewards like critical networks, especially with bigger corporations with who they could even enter into sub-contracts.
For that reason, you will constantly be locked out of useful enterprise associations. Simply set, if an organization is not a taxpayer it are unable to expand!
Customized tax and customs advisory expert services
These are companies offered by the Kenya Earnings Authority (KRA) by way of its wide network, social media, and telephony between other individuals to hell MSMEs operators recognize the tax and customs environment particularly if they intend to get into import and export enterprise.
This is in addition to market and networking alternatives through its taxpayers’ roundtables that the taxman organizes to carry with each other enterprises for reasons of sharing concerns affecting them and acquiring enterprise tips in line with the main company of the authority.
It is throughout these meetings that the Authority avails opportunities for business people to community and even establish new markets.
Import and export incentives
As a smaller company operator, your aim is to expand from serving the regional persons to doing organization globally. No business enterprise operator would their undertaking stay stagnant hence the require for registration.
MSMEs registered with the taxman stand the likelihood of obtaining import incentives that consist of minimized import tariffs on inputs these as equipment and uncooked components to spur producing of goods for export the place the authority offers free of charge VAT for its associates.
The taxman also has a provision for funds allowances on set up equipment and a attainable 20 p.c export compensation arrangement.
Several enterprise chances
Did you know? In line with the govt directive on public procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, women, and persons with disabilities which are generally MSMEs. An additional motive why you need to register as a tiny business enterprise operator.
Unregistered enterprises ought to register as taxpayers in get to open doors to enterprise prospects that can only be accessed at the time the business acquires the all-crucial PIN amount.