In his Eighth State of the Country Handle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Small, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy yet a huge amount of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed identical enterprises in Kenya.
This suggests that significantly less than 27 % of all organizations in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises although only 7.1 p.c and .7 p.c are tiny and medium enterprises respectively.
The reason some of the MSME operators give for not registering their companies is that they fear getting subjected to higher taxation that could stop up taking in on their profit.
Having said that, as you will quickly find, there are many gains that await unregistered MSME operators as taxpayers that which include financial loans and authorities expert services.
Bid for authorities contracts
As a registered little company operator as a taxpayer, you will be putting by yourself in the greatest posture to bid and win governing administration tenders and trade with the governing administration and non-authorities institutions.
If your business enterprise is not registered, you are unable to bid for federal government contracts or even partner with other enterprises to acquire benefit of communal rewards which include critical networks, in particular with larger sized corporations with who they could even enter into sub-contracts.
For that reason, you will continually be locked out of valuable enterprise associations. Basically put, if an organization is not a taxpayer it simply cannot improve!
Personalised tax and customs advisory providers
These are services supplied by the Kenya Revenue Authority (KRA) by way of its huge network, social media, and telephony amid other people to hell MSMEs operators realize the tax and customs environment especially if they intend to get into import and export company.
This is in addition to current market and networking possibilities through its taxpayers’ roundtables that the taxman organizes to convey jointly businesses for needs of sharing problems affecting them and obtaining small business information in line with the main enterprise of the authority.
It is during these conferences that the Authority avails alternatives for business owners to network and even create new marketplaces.
Import and export incentives
As a little organization operator, your purpose is to develop from serving the neighborhood persons to performing organization globally. No enterprise operator would their enterprise continue to be stagnant therefore the want for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that involve decreased import tariffs on inputs these kinds of as machinery and raw elements to spur manufacturing of products for export wherever the authority offers absolutely free VAT for its members.
The taxman also has a provision for money allowances on set up machinery and a doable 20 percent export payment arrangement.
Various organization chances
Did you know? In line with the government directive on community procurement, 30 per cent of all procurement at KRA goes to enterprises run by the youth, girls, and people today with disabilities which are generally MSMEs. Yet another cause why you want to sign up as a small business operator.
Unregistered enterprises ought to sign-up as taxpayers in order to open doors to business prospects that can only be accessed as soon as the organization acquires the all-significant PIN variety.
