In his Eighth Point out of the Country Address on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy nonetheless a substantial selection of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable businesses in Kenya.
This implies that much less than 27 percent of all corporations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises whilst only 7.1 p.c and .7 percent are tiny and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their corporations is that they anxiety being subjected to higher taxation that may possibly stop up feeding on on their earnings.
Even so, as you will soon uncover, there are a lot of added benefits that await unregistered MSME operators as taxpayers that such as financial loans and governing administration providers.
Bid for govt contracts
As a registered tiny business operator as a taxpayer, you will be putting on your own in the most effective placement to bid and get govt tenders and trade with the government and non-authorities establishments.
If your business is not registered, you are unable to bid for govt contracts or even husband or wife with other enterprises to acquire advantage of communal added benefits together with essential networks, in particular with bigger organizations with who they could even enter into sub-contracts.
Consequently, you will continuously be locked out of handy organization associations. Simply just put, if an organization is not a taxpayer it can’t mature!
Individualized tax and customs advisory providers
These are solutions presented by the Kenya Earnings Authority (KRA) by way of its broad community, social media, and telephony among many others to hell MSMEs operators fully grasp the tax and customs atmosphere specially if they intend to get into import and export small business.
This is in addition to current market and networking possibilities by way of its taxpayers’ roundtables that the taxman organizes to bring alongside one another businesses for reasons of sharing issues influencing them and obtaining small business suggestions in line with the main small business of the authority.
It is through these meetings that the Authority avails prospects for business owners to community and even set up new marketplaces.
Import and export incentives
As a smaller company operator, your aim is to develop from serving the area people to executing organization globally. No business operator would their enterprise stay stagnant therefore the will need for registration.
MSMEs registered with the taxman stand the prospect of obtaining import incentives that consist of diminished import tariffs on inputs these kinds of as machinery and raw components to spur producing of products for export the place the authority gives no cost VAT for its associates.
The taxman also has a provision for cash allowances on mounted equipment and a attainable 20 per cent export compensation arrangement.
A lot of business opportunities
Did you know? In line with the govt directive on community procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, women, and men and women with disabilities which are largely MSMEs. A different explanation why you want to sign up as a small company operator.
Unregistered enterprises must sign-up as taxpayers in get to open doorways to organization chances that can only be accessed once the organization acquires the all-significant PIN range.