In his Eighth Point out of the Nation Handle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system but a enormous amount of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed identical enterprises in Kenya.
This suggests that fewer than 27 per cent of all businesses in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 p.c and .7 % are small and medium enterprises respectively.
The cause some of the MSME operators give for not registering their organizations is that they fear staying subjected to substantial taxation that may conclude up having on their earnings.
Nonetheless, as you will shortly find out, there are quite a few benefits that await unregistered MSME operators as taxpayers that like financial loans and government expert services.
Bid for authorities contracts
As a registered modest small business operator as a taxpayer, you will be placing yourself in the very best situation to bid and get authorities tenders and trade with the authorities and non-governing administration establishments.
If your enterprise is not registered, you are unable to bid for authorities contracts or even lover with other businesses to choose edge of communal positive aspects which include critical networks, particularly with greater providers with who they could even enter into sub-contracts.
As a result, you will consistently be locked out of useful business associations. Basically put, if an enterprise is not a taxpayer it can’t improve!
Customized tax and customs advisory providers
These are products and services available by the Kenya Income Authority (KRA) through its large network, social media, and telephony amid many others to hell MSMEs operators have an understanding of the tax and customs natural environment specifically if they intend to get into import and export enterprise.
This is in addition to sector and networking opportunities by means of its taxpayers’ roundtables that the taxman organizes to provide alongside one another firms for functions of sharing concerns influencing them and getting company guidance in line with the core organization of the authority.
It is throughout these conferences that the Authority avails alternatives for entrepreneurs to network and even build new markets.
Import and export incentives
As a little small business operator, your target is to increase from serving the nearby folks to doing business enterprise globally. No enterprise operator would their undertaking remain stagnant consequently the have to have for registration.
MSMEs registered with the taxman stand the probability of getting import incentives that involve reduced import tariffs on inputs these types of as equipment and raw supplies to spur production of merchandise for export wherever the authority gives totally free VAT for its users.
The taxman also has a provision for capital allowances on installed machinery and a doable 20 p.c export compensation arrangement.
Many small business options
Did you know? In line with the govt directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, females, and folks with disabilities which are primarily MSMEs. Another cause why you need to have to sign-up as a modest business operator.
Unregistered enterprises must sign-up as taxpayers in purchase to open doors to organization alternatives that can only be accessed when the small business acquires the all-significant PIN amount.