In his Eighth Point out of the Nation Tackle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nevertheless a large range of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed equivalent companies in Kenya.
This signifies that considerably less than 27 percent of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises whilst only 7.1 percent and .7 p.c are little and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their enterprises is that they fear currently being subjected to higher taxation that could stop up taking in on their gain.
On the other hand, as you will soon find, there are several positive aspects that await unregistered MSME operators as taxpayers that which includes loans and authorities expert services.
Bid for authorities contracts
As a registered tiny small business operator as a taxpayer, you will be placing you in the greatest position to bid and earn governing administration tenders and trade with the authorities and non-govt institutions.
If your business is not registered, you can not bid for federal government contracts or even lover with other enterprises to take advantage of communal positive aspects which include important networks, particularly with more substantial organizations with who they could even enter into sub-contracts.
As a result, you will repeatedly be locked out of useful enterprise associations. Merely put, if an organization is not a taxpayer it are not able to increase!
Customized tax and customs advisory expert services
These are solutions presented by the Kenya Earnings Authority (KRA) by way of its broad network, social media, and telephony between other individuals to hell MSMEs operators understand the tax and customs atmosphere primarily if they intend to get into import and export business.
This is in addition to market place and networking prospects by its taxpayers’ roundtables that the taxman organizes to bring with each other corporations for purposes of sharing problems impacting them and getting business guidance in line with the main small business of the authority.
It is in the course of these meetings that the Authority avails prospects for entrepreneurs to network and even establish new markets.
Import and export incentives
As a smaller business enterprise operator, your target is to grow from serving the community persons to performing business enterprise globally. No enterprise operator would their enterprise continue being stagnant hence the need for registration.
MSMEs registered with the taxman stand the chance of acquiring import incentives that include lowered import tariffs on inputs this sort of as machinery and uncooked products to spur producing of merchandise for export exactly where the authority presents cost-free VAT for its users.
The taxman also has a provision for capital allowances on mounted machinery and a probable 20 percent export payment arrangement.
Many company options
Did you know? In line with the authorities directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, women, and people with disabilities which are predominantly MSMEs. One more motive why you need to register as a small business enterprise operator.
Unregistered enterprises need to register as taxpayers in purchase to open doorways to business enterprise prospects that can only be accessed at the time the business acquires the all-crucial PIN variety.