In his Eighth State of the Nation Deal with on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy still a big range of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed similar organizations in Kenya.
This indicates that significantly less than 27 % of all enterprises in Kenya are registered. Out of these, 92.2 percent are micro-enterprises even though only 7.1 per cent and .7 per cent are tiny and medium enterprises respectively.
The reason some of the MSME operators give for not registering their enterprises is that they worry being subjected to high taxation that may perhaps end up feeding on on their profit.
Having said that, as you will soon learn, there are numerous gains that await unregistered MSME operators as taxpayers that like financial loans and federal government expert services.
Bid for federal government contracts
As a registered modest business operator as a taxpayer, you will be placing oneself in the finest posture to bid and gain federal government tenders and trade with the governing administration and non-government institutions.
If your small business is not registered, you simply cannot bid for governing administration contracts or even companion with other organizations to take advantage of communal positive aspects which includes essential networks, specifically with greater organizations with who they could even enter into sub-contracts.
Consequently, you will constantly be locked out of valuable organization associations. Simply place, if an organization is not a taxpayer it simply cannot grow!
Individualized tax and customs advisory expert services
These are solutions provided by the Kenya Income Authority (KRA) as a result of its large network, social media, and telephony amid others to hell MSMEs operators comprehend the tax and customs natural environment specifically if they intend to get into import and export company.
This is in addition to industry and networking prospects through its taxpayers’ roundtables that the taxman organizes to deliver collectively businesses for purposes of sharing problems influencing them and receiving enterprise tips in line with the core small business of the authority.
It is for the duration of these conferences that the Authority avails alternatives for entrepreneurs to network and even establish new marketplaces.
Import and export incentives
As a compact enterprise operator, your target is to develop from serving the area people to accomplishing organization globally. No company operator would their undertaking remain stagnant therefore the require for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that contain diminished import tariffs on inputs these types of as machinery and uncooked supplies to spur production of products for export where by the authority delivers totally free VAT for its associates.
The taxman also has a provision for capital allowances on installed equipment and a probable 20 percent export payment arrangement.
A lot of organization possibilities
Did you know? In line with the government directive on general public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, gals, and folks with disabilities which are mostly MSMEs. One more explanation why you want to register as a modest small business operator.
Unregistered enterprises ought to sign-up as taxpayers in buy to open doors to organization chances that can only be accessed as soon as the business acquires the all-critical PIN amount.