In his Eighth Point out of the Nation Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy however a huge quantity of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed identical corporations in Kenya.
This signifies that considerably less than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 per cent and .7 % are little and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their organizations is that they panic getting subjected to substantial taxation that could close up eating on their income.
On the other hand, as you will quickly find, there are several rewards that await unregistered MSME operators as taxpayers that which includes financial loans and govt providers.
Bid for authorities contracts
As a registered little organization operator as a taxpayer, you will be placing your self in the most effective place to bid and acquire governing administration tenders and trade with the governing administration and non-authorities institutions.
If your business enterprise is not registered, you can’t bid for authorities contracts or even partner with other organizations to take gain of communal advantages including important networks, primarily with bigger companies with who they could even enter into sub-contracts.
Thus, you will constantly be locked out of beneficial enterprise associations. Simply set, if an business is not a taxpayer it can not develop!
Customized tax and customs advisory expert services
These are providers provided by the Kenya Profits Authority (KRA) through its wide network, social media, and telephony between other individuals to hell MSMEs operators realize the tax and customs ecosystem particularly if they intend to get into import and export organization.
This is in addition to marketplace and networking alternatives as a result of its taxpayers’ roundtables that the taxman organizes to provide collectively companies for applications of sharing concerns affecting them and obtaining business enterprise suggestions in line with the core business enterprise of the authority.
It is in the course of these conferences that the Authority avails options for entrepreneurs to network and even set up new marketplaces.
Import and export incentives
As a compact organization operator, your target is to grow from serving the nearby folks to executing company globally. No business operator would their undertaking remain stagnant therefore the want for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that consist of minimized import tariffs on inputs this sort of as equipment and raw resources to spur producing of items for export in which the authority gives cost-free VAT for its users.
The taxman also has a provision for cash allowances on installed equipment and a doable 20 per cent export payment arrangement.
Various company possibilities
Did you know? In line with the govt directive on general public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, ladies, and individuals with disabilities which are generally MSMEs. Yet another purpose why you have to have to sign up as a compact business operator.
Unregistered enterprises ought to sign up as taxpayers in buy to open doors to organization possibilities that can only be accessed once the business enterprise acquires the all-vital PIN quantity.