In his Eighth State of the Nation Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system but a large amount of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This means that fewer than 27 per cent of all enterprises in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 p.c and .7 p.c are smaller and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their enterprises is that they panic becoming subjected to substantial taxation that may end up feeding on on their revenue.
However, as you will shortly find out, there are lots of advantages that await unregistered MSME operators as taxpayers that which include loans and governing administration expert services.
Bid for governing administration contracts
As a registered tiny company operator as a taxpayer, you will be putting your self in the most effective posture to bid and acquire authorities tenders and trade with the authorities and non-government establishments.
If your company is not registered, you can’t bid for government contracts or even lover with other businesses to choose edge of communal positive aspects together with very important networks, specially with bigger companies with who they could even enter into sub-contracts.
Thus, you will repeatedly be locked out of practical organization associations. Merely place, if an enterprise is not a taxpayer it simply cannot improve!
Individualized tax and customs advisory services
These are solutions available by the Kenya Profits Authority (KRA) via its vast network, social media, and telephony between many others to hell MSMEs operators comprehend the tax and customs surroundings specially if they intend to get into import and export company.
This is in addition to current market and networking chances by means of its taxpayers’ roundtables that the taxman organizes to convey collectively enterprises for uses of sharing issues affecting them and obtaining enterprise advice in line with the core organization of the authority.
It is in the course of these conferences that the Authority avails alternatives for business owners to network and even create new marketplaces.
Import and export incentives
As a compact company operator, your target is to grow from serving the community individuals to accomplishing enterprise globally. No company operator would their undertaking stay stagnant therefore the need to have for registration.
MSMEs registered with the taxman stand the prospect of receiving import incentives that include things like lessened import tariffs on inputs these types of as equipment and raw materials to spur manufacturing of items for export where the authority offers no cost VAT for its users.
The taxman also has a provision for funds allowances on set up machinery and a doable 20 % export payment arrangement.
A lot of enterprise alternatives
Did you know? In line with the govt directive on community procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, gals, and people with disabilities which are mainly MSMEs. One more rationale why you need to register as a little enterprise operator.
Unregistered enterprises need to register as taxpayers in order to open doorways to company alternatives that can only be accessed after the business enterprise acquires the all-important PIN amount.