In his Eighth Condition of the Country Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy still a large selection of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable corporations in Kenya.
This indicates that a lot less than 27 p.c of all companies in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises while only 7.1 per cent and .7 percent are small and medium enterprises respectively.
The reason some of the MSME operators give for not registering their companies is that they worry getting subjected to significant taxation that may possibly conclusion up taking in on their revenue.
Nonetheless, as you will before long explore, there are a lot of benefits that await unregistered MSME operators as taxpayers that which includes loans and government providers.
Bid for government contracts
As a registered smaller organization operator as a taxpayer, you will be placing yourself in the most effective place to bid and win govt tenders and trade with the government and non-federal government institutions.
If your company is not registered, you simply cannot bid for government contracts or even lover with other enterprises to get gain of communal rewards including critical networks, specially with larger firms with who they could even enter into sub-contracts.
Consequently, you will continuously be locked out of useful business enterprise associations. Basically put, if an organization is not a taxpayer it are not able to expand!
Individualized tax and customs advisory companies
These are providers offered by the Kenya Revenue Authority (KRA) by means of its huge community, social media, and telephony among other people to hell MSMEs operators comprehend the tax and customs atmosphere in particular if they intend to get into import and export small business.
This is in addition to marketplace and networking options by its taxpayers’ roundtables that the taxman organizes to bring alongside one another corporations for purposes of sharing troubles impacting them and receiving small business information in line with the core company of the authority.
It is throughout these meetings that the Authority avails options for business owners to community and even establish new markets.
Import and export incentives
As a compact business operator, your intention is to increase from serving the neighborhood individuals to carrying out small business globally. No organization operator would their venture continue to be stagnant for this reason the need to have for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that involve decreased import tariffs on inputs such as equipment and uncooked components to spur manufacturing of products for export where the authority delivers totally free VAT for its customers.
The taxman also has a provision for money allowances on put in equipment and a attainable 20 p.c export payment arrangement.
Various business alternatives
Did you know? In line with the govt directive on community procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, women, and folks with disabilities which are mostly MSMEs. One more rationale why you will need to sign up as a tiny company operator.
Unregistered enterprises should sign-up as taxpayers in buy to open up doorways to business prospects that can only be accessed the moment the organization acquires the all-significant PIN selection.