In his Eighth Condition of the Nation Deal with on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system nevertheless a enormous quantity of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed similar corporations in Kenya.
This signifies that significantly less than 27 percent of all companies in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 per cent and .7 % are modest and medium enterprises respectively.
The cause some of the MSME operators give for not registering their firms is that they fear currently being subjected to superior taxation that could stop up feeding on on their gain.
On the other hand, as you will shortly find out, there are many rewards that await unregistered MSME operators as taxpayers that including financial loans and authorities services.
Bid for federal government contracts
As a registered small enterprise operator as a taxpayer, you will be placing by yourself in the best position to bid and get government tenders and trade with the government and non-govt institutions.
If your company is not registered, you can’t bid for governing administration contracts or even partner with other firms to consider benefit of communal advantages which include important networks, especially with larger sized corporations with who they could even enter into sub-contracts.
As a result, you will consistently be locked out of helpful business enterprise associations. Simply just put, if an company is not a taxpayer it simply cannot expand!
Customized tax and customs advisory companies
These are providers presented by the Kenya Revenue Authority (KRA) by means of its broad community, social media, and telephony amongst others to hell MSMEs operators understand the tax and customs environment specifically if they intend to get into import and export organization.
This is in addition to market place and networking options by way of its taxpayers’ roundtables that the taxman organizes to deliver together businesses for functions of sharing challenges impacting them and obtaining company advice in line with the main business of the authority.
It is through these meetings that the Authority avails opportunities for business owners to community and even create new marketplaces.
Import and export incentives
As a smaller business operator, your target is to improve from serving the nearby people to doing business globally. No business operator would their undertaking stay stagnant for this reason the require for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that involve minimized import tariffs on inputs these as equipment and raw supplies to spur manufacturing of goods for export in which the authority presents free VAT for its associates.
The taxman also has a provision for money allowances on mounted equipment and a possible 20 % export payment arrangement.
Many enterprise opportunities
Did you know? In line with the federal government directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, women of all ages, and persons with disabilities which are mainly MSMEs. Another explanation why you need to have to sign up as a tiny business operator.
Unregistered enterprises ought to register as taxpayers in order to open up doors to enterprise prospects that can only be accessed after the enterprise acquires the all-critical PIN variety.