In his Eighth Point out of the Nation Address on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nevertheless a massive range of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed very similar corporations in Kenya.
This implies that a lot less than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises although only 7.1 per cent and .7 percent are tiny and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their organizations is that they fear becoming subjected to large taxation that may possibly close up consuming on their profit.
However, as you will soon learn, there are quite a few advantages that await unregistered MSME operators as taxpayers that such as financial loans and authorities expert services.
Bid for federal government contracts
As a registered tiny enterprise operator as a taxpayer, you will be placing on your own in the greatest place to bid and win authorities tenders and trade with the government and non-government establishments.
If your company is not registered, you simply cannot bid for authorities contracts or even partner with other firms to get advantage of communal advantages which include crucial networks, primarily with more substantial corporations with who they could even enter into sub-contracts.
For that reason, you will consistently be locked out of useful business enterprise associations. Only place, if an company is not a taxpayer it can’t grow!
Personalized tax and customs advisory products and services
These are solutions presented by the Kenya Income Authority (KRA) by means of its vast community, social media, and telephony among some others to hell MSMEs operators realize the tax and customs atmosphere primarily if they intend to get into import and export enterprise.
This is in addition to current market and networking options via its taxpayers’ roundtables that the taxman organizes to provide collectively corporations for needs of sharing concerns impacting them and getting company assistance in line with the core organization of the authority.
It is throughout these conferences that the Authority avails prospects for business people to network and even establish new marketplaces.
Import and export incentives
As a little company operator, your target is to expand from serving the area people to carrying out small business globally. No organization operator would their undertaking continue to be stagnant that’s why the need for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that involve reduced import tariffs on inputs such as machinery and uncooked supplies to spur producing of products for export wherever the authority offers totally free VAT for its members.
The taxman also has a provision for cash allowances on installed machinery and a possible 20 per cent export payment arrangement.
Numerous business enterprise chances
Did you know? In line with the governing administration directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, females, and men and women with disabilities which are predominantly MSMEs. Yet another cause why you have to have to sign-up as a compact company operator.
Unregistered enterprises need to sign-up as taxpayers in get to open up doors to organization chances that can only be accessed as soon as the enterprise acquires the all-important PIN variety.