In his Eighth Condition of the Nation Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy nevertheless a enormous variety of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed equivalent firms in Kenya.
This implies that fewer than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 percent and .7 per cent are tiny and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their businesses is that they worry remaining subjected to large taxation that may well conclude up eating on their earnings.
Even so, as you will shortly find out, there are lots of advantages that await unregistered MSME operators as taxpayers that like financial loans and governing administration services.
Bid for governing administration contracts
As a registered compact business enterprise operator as a taxpayer, you will be putting your self in the very best placement to bid and get govt tenders and trade with the authorities and non-authorities institutions.
If your enterprise is not registered, you are unable to bid for government contracts or even companion with other organizations to choose edge of communal benefits together with vital networks, primarily with more substantial companies with who they could even enter into sub-contracts.
Hence, you will constantly be locked out of useful organization associations. Simply just place, if an business is not a taxpayer it can’t expand!
Personalized tax and customs advisory services
These are solutions made available by the Kenya Income Authority (KRA) as a result of its broad community, social media, and telephony amid other individuals to hell MSMEs operators realize the tax and customs natural environment especially if they intend to get into import and export business.
This is in addition to marketplace and networking alternatives by means of its taxpayers’ roundtables that the taxman organizes to provide alongside one another firms for purposes of sharing issues affecting them and acquiring organization information in line with the core small business of the authority.
It is all through these conferences that the Authority avails chances for business people to community and even set up new markets.
Import and export incentives
As a little business operator, your objective is to mature from serving the regional folks to undertaking company globally. No company operator would their enterprise remain stagnant consequently the want for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that consist of reduced import tariffs on inputs this sort of as equipment and uncooked supplies to spur manufacturing of products for export in which the authority offers free of charge VAT for its associates.
The taxman also has a provision for funds allowances on installed equipment and a feasible 20 percent export payment arrangement.
A lot of small business possibilities
Did you know? In line with the authorities directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, women, and men and women with disabilities which are mostly MSMEs. One more rationale why you have to have to sign-up as a modest small business operator.
Unregistered enterprises need to sign-up as taxpayers in buy to open up doorways to business chances that can only be accessed after the business acquires the all-crucial PIN variety.