In his Eighth State of the Country Deal with 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 big amount of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed very similar businesses in Kenya.
This suggests that fewer than 27 per cent of all corporations in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 per cent and .7 percent are compact and medium enterprises respectively.
The cause some of the MSME operators give for not registering their businesses is that they anxiety currently being subjected to superior taxation that may possibly conclude up eating on their gain.
On the other hand, as you will soon discover, there are a lot of benefits that await unregistered MSME operators as taxpayers that which includes financial loans and governing administration companies.
Bid for government contracts
As a registered smaller business enterprise operator as a taxpayer, you will be placing your self in the most effective position to bid and acquire authorities tenders and trade with the govt and non-governing administration institutions.
If your enterprise is not registered, you simply cannot bid for authorities contracts or even partner with other firms to choose benefit of communal positive aspects which include crucial networks, specially with much larger providers with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of beneficial business enterprise associations. Just put, if an enterprise is not a taxpayer it are not able to increase!
Individualized tax and customs advisory solutions
These are products and services offered by the Kenya Income Authority (KRA) by its large network, social media, and telephony among the other folks to hell MSMEs operators realize the tax and customs surroundings specially if they intend to get into import and export business enterprise.
This is in addition to marketplace and networking chances by its taxpayers’ roundtables that the taxman organizes to deliver alongside one another companies for needs of sharing difficulties affecting them and getting small business information in line with the main business of the authority.
It is through these meetings that the Authority avails chances for entrepreneurs to network and even establish new marketplaces.
Import and export incentives
As a smaller organization operator, your intention is to mature from serving the nearby men and women to accomplishing small business globally. No organization operator would their venture continue to be stagnant that’s why the want for registration.
MSMEs registered with the taxman stand the chance of getting import incentives that involve lessened import tariffs on inputs these as machinery and raw supplies to spur production of items for export exactly where the authority gives no cost VAT for its members.
The taxman also has a provision for capital allowances on installed machinery and a achievable 20 per cent export payment arrangement.
Various business possibilities
Did you know? In line with the federal government directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, girls, and people with disabilities which are largely MSMEs. Another motive why you have to have to sign-up as a compact business operator.
Unregistered enterprises need to sign up as taxpayers in purchase to open up doorways to company alternatives that can only be accessed when the business enterprise acquires the all-vital PIN variety.