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, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate yet a huge amount of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed similar enterprises in Kenya.
This implies that less than 27 percent of all companies in Kenya are registered. Out of these, 92.2 percent are micro-enterprises though only 7.1 per cent and .7 p.c are tiny and medium enterprises respectively.
The motive some of the MSME operators give for not registering their corporations is that they worry remaining subjected to large taxation that may well end up taking in on their gain.
Nonetheless, as you will shortly uncover, there are a lot of rewards that await unregistered MSME operators as taxpayers that which include financial loans and authorities companies.
Bid for federal government contracts
As a registered compact company operator as a taxpayer, you will be putting yourself in the best posture to bid and gain govt tenders and trade with the authorities and non-federal government establishments.
If your business is not registered, you cannot bid for government contracts or even lover with other firms to choose edge of communal rewards together with vital networks, in particular with bigger corporations with who they could even enter into sub-contracts.
Hence, you will repeatedly be locked out of helpful small business associations. Merely place, if an enterprise is not a taxpayer it can’t grow!
Personalised tax and customs advisory solutions
These are expert services presented by the Kenya Earnings Authority (KRA) through its extensive network, social media, and telephony amongst other individuals to hell MSMEs operators understand the tax and customs surroundings specifically if they intend to get into import and export small business.
This is in addition to current market and networking options via its taxpayers’ roundtables that the taxman organizes to provide jointly corporations for needs of sharing issues affecting them and receiving company information in line with the core business of the authority.
It is for the duration of these meetings that the Authority avails chances for business people to network and even build new markets.
Import and export incentives
As a little business operator, your goal is to grow from serving the neighborhood individuals to accomplishing company globally. No business operator would their venture stay stagnant that’s why the want for registration.
MSMEs registered with the taxman stand the chance of getting import incentives that contain lowered import tariffs on inputs these types of as machinery and uncooked resources to spur manufacturing of merchandise for export in which the authority presents totally free VAT for its associates.
The taxman also has a provision for cash allowances on put in machinery and a possible 20 p.c export compensation arrangement.
Numerous organization options
Did you know? In line with the authorities directive on public procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, girls, and persons with disabilities which are generally MSMEs. A further motive why you want to register as a little business operator.
Unregistered enterprises really should sign-up as taxpayers in get to open up doors to business enterprise alternatives that can only be accessed at the time the business acquires the all-essential PIN quantity.