In his Eighth State of the Country Address on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system however a massive 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 businesses in Kenya.
This indicates that considerably less than 27 % of all organizations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 per cent and .7 per cent are little and medium enterprises respectively.
The motive some of the MSME operators give for not registering their corporations is that they concern staying subjected to high taxation that could finish up feeding on on their earnings.
Nonetheless, as you will before long uncover, there are many benefits that await unregistered MSME operators as taxpayers that which includes loans and government services.
Bid for authorities contracts
As a registered modest business enterprise operator as a taxpayer, you will be putting oneself in the best position to bid and earn government tenders and trade with the federal government and non-govt establishments.
If your company is not registered, you can not bid for government contracts or even lover with other enterprises to consider gain of communal added benefits like very important networks, especially with larger organizations with who they could even enter into sub-contracts.
Therefore, you will continually be locked out of useful enterprise associations. Simply just set, if an company is not a taxpayer it can not expand!
Personalised tax and customs advisory companies
These are companies supplied by the Kenya Earnings Authority (KRA) via its large community, social media, and telephony amid other folks to hell MSMEs operators have an understanding of the tax and customs atmosphere specially if they intend to get into import and export business.
This is in addition to sector and networking opportunities by way of its taxpayers’ roundtables that the taxman organizes to deliver with each other companies for reasons of sharing challenges impacting them and obtaining company suggestions in line with the main company of the authority.
It is during these conferences that the Authority avails chances for business people to network and even build new markets.
Import and export incentives
As a smaller enterprise operator, your target is to develop from serving the regional men and women to doing company globally. No company operator would their enterprise remain stagnant as a result the need for registration.
MSMEs registered with the taxman stand the chance of receiving import incentives that contain reduced import tariffs on inputs these kinds of as equipment and uncooked materials to spur production of merchandise for export exactly where the authority presents totally free VAT for its customers.
The taxman also has a provision for cash allowances on mounted machinery and a probable 20 percent export compensation arrangement.
Quite a few small business alternatives
Did you know? In line with the govt directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, ladies, and people with disabilities which are predominantly MSMEs. One more purpose why you need to register as a tiny business enterprise operator.
Unregistered enterprises ought to register as taxpayers in purchase to open doorways to small business chances that can only be accessed as soon as the company acquires the all-significant PIN number.