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, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy but a big selection of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable enterprises in Kenya.
This usually means that much less than 27 percent of all firms in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises when only 7.1 p.c and .7 % are little and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their corporations is that they fear getting subjected to superior taxation that might stop up feeding on on their gain.
Even so, as you will soon find, there are quite a few rewards that await unregistered MSME operators as taxpayers that like loans and government providers.
Bid for governing administration contracts
As a registered smaller company operator as a taxpayer, you will be placing by yourself in the greatest placement to bid and acquire govt tenders and trade with the federal government and non-authorities institutions.
If your small business is not registered, you simply cannot bid for government contracts or even spouse with other firms to choose benefit of communal positive aspects which include very important networks, in particular with larger corporations with who they could even enter into sub-contracts.
Therefore, you will constantly be locked out of valuable business enterprise associations. Simply just put, if an enterprise is not a taxpayer it can’t grow!
Personalized tax and customs advisory companies
These are solutions offered by the Kenya Income Authority (KRA) as a result of its vast community, social media, and telephony amid many others to hell MSMEs operators have an understanding of the tax and customs ecosystem primarily if they intend to get into import and export business enterprise.
This is in addition to marketplace and networking alternatives by its taxpayers’ roundtables that the taxman organizes to bring with each other firms for uses of sharing challenges impacting them and obtaining business advice in line with the core organization of the authority.
It is through these meetings that the Authority avails opportunities for business people to network and even establish new marketplaces.
Import and export incentives
As a smaller enterprise operator, your target is to increase from serving the community people today to doing business globally. No business enterprise operator would their undertaking keep on being stagnant that’s why the need for registration.
MSMEs registered with the taxman stand the possibility of getting import incentives that include diminished import tariffs on inputs such as equipment and raw components to spur producing of goods for export where the authority provides totally free VAT for its users.
The taxman also has a provision for cash allowances on set up equipment and a attainable 20 % export compensation arrangement.
Many organization 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 operate by the youth, females, and people with disabilities which are primarily MSMEs. One more rationale why you require to sign up as a modest company operator.
Unregistered enterprises should sign-up as taxpayers in purchase to open doors to enterprise prospects that can only be accessed after the organization acquires the all-crucial PIN quantity.