In his Eighth Point out of the Nation Handle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate still a large amount of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed comparable enterprises in Kenya.
This means that considerably less than 27 p.c of all companies in Kenya are registered. Out of these, 92.2 % are micro-enterprises although only 7.1 p.c and .7 % are little and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their businesses is that they worry being subjected to higher taxation that may well conclude up ingesting on their revenue.
Having said that, as you will shortly find out, there are lots of positive aspects that await unregistered MSME operators as taxpayers that which includes financial loans and government companies.
Bid for governing administration contracts
As a registered modest business operator as a taxpayer, you will be putting on your own in the finest posture to bid and win authorities tenders and trade with the govt and non-govt institutions.
If your small business is not registered, you cannot bid for government contracts or even spouse with other firms to get advantage of communal added benefits like critical networks, specially with greater businesses with who they could even enter into sub-contracts.
As a result, you will consistently be locked out of helpful enterprise associations. Simply set, if an enterprise is not a taxpayer it cannot develop!
Individualized tax and customs advisory services
These are providers offered by the Kenya Profits Authority (KRA) by way of its large community, social media, and telephony between many others to hell MSMEs operators fully grasp the tax and customs ecosystem specifically if they intend to get into import and export small business.
This is in addition to sector and networking options through its taxpayers’ roundtables that the taxman organizes to carry alongside one another businesses for uses of sharing difficulties influencing them and receiving enterprise tips in line with the main small business of the authority.
It is for the duration of these conferences that the Authority avails options for business people to network and even establish new markets.
Import and export incentives
As a modest enterprise operator, your objective is to expand from serving the community persons to doing business enterprise globally. No company operator would their undertaking stay stagnant as a result the need for registration.
MSMEs registered with the taxman stand the opportunity of obtaining import incentives that involve decreased import tariffs on inputs this kind of as machinery and raw elements to spur production of goods for export wherever the authority delivers free VAT for its users.
The taxman also has a provision for cash allowances on put in equipment and a achievable 20 p.c export payment arrangement.
A lot of enterprise alternatives
Did you know? In line with the authorities directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, women, and people with disabilities which are mainly MSMEs. A different motive why you require to sign up as a modest small business operator.
Unregistered enterprises must sign-up as taxpayers in get to open doorways to company prospects that can only be accessed at the time the organization acquires the all-significant PIN amount.