In his Eighth State of the Nation Address 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 climate yet a large amount of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed equivalent enterprises in Kenya.
This implies that fewer than 27 % of all firms in Kenya are registered. Out of these, 92.2 percent are micro-enterprises even though only 7.1 per cent and .7 percent are tiny and medium enterprises respectively.
The motive some of the MSME operators give for not registering their businesses is that they anxiety staying subjected to superior taxation that may possibly close up taking in on their income.
Nevertheless, as you will soon find, there are lots of benefits that await unregistered MSME operators as taxpayers that such as financial loans and govt services.
Bid for governing administration contracts
As a registered smaller company operator as a taxpayer, you will be putting on your own in the best position to bid and get governing administration tenders and trade with the government and non-federal government establishments.
If your small business is not registered, you cannot bid for government contracts or even associate with other organizations to just take benefit of communal positive aspects such as essential networks, particularly with larger sized businesses with who they could even enter into sub-contracts.
Therefore, you will continuously be locked out of handy business associations. Simply set, if an company is not a taxpayer it simply cannot grow!
Personalized tax and customs advisory companies
These are services provided by the Kenya Revenue Authority (KRA) by its extensive network, social media, and telephony amongst some others to hell MSMEs operators have an understanding of the tax and customs environment specially if they intend to get into import and export business.
This is in addition to market place and networking options by way of its taxpayers’ roundtables that the taxman organizes to carry with each other corporations for applications of sharing difficulties affecting them and getting small business assistance in line with the main business enterprise of the authority.
It is for the duration of these conferences that the Authority avails prospects for business owners to community and even set up new markets.
Import and export incentives
As a compact organization operator, your goal is to grow from serving the area persons to performing company globally. No business enterprise operator would their venture continue to be stagnant for this reason the will need for registration.
MSMEs registered with the taxman stand the probability of getting import incentives that involve decreased import tariffs on inputs these kinds of as equipment and uncooked materials to spur manufacturing of merchandise for export wherever the authority presents totally free VAT for its customers.
The taxman also has a provision for cash allowances on set up machinery and a feasible 20 p.c export payment arrangement.
Many business enterprise chances
Did you know? In line with the federal government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises operate by the youth, women, and men and women with disabilities which are predominantly MSMEs. One more cause why you will need to sign up as a compact company operator.
Unregistered enterprises should sign-up as taxpayers in order to open doors to business possibilities that can only be accessed at the time the business enterprise acquires the all-vital PIN amount.