In his Eighth Condition of the Nation Address on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate nonetheless a huge number of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed comparable companies in Kenya.
This implies that a lot less than 27 p.c of all enterprises in Kenya are registered. Out of these, 92.2 % are micro-enterprises while only 7.1 per cent and .7 % are tiny and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their organizations is that they concern being subjected to high taxation that may perhaps end up having on their profit.
Even so, as you will quickly uncover, there are numerous positive aspects that await unregistered MSME operators as taxpayers that such as financial loans and authorities companies.
Bid for govt contracts
As a registered smaller enterprise operator as a taxpayer, you will be placing on your own in the most effective placement to bid and gain governing administration tenders and trade with the government and non-governing administration establishments.
If your small business is not registered, you can’t bid for government contracts or even companion with other firms to choose edge of communal added benefits such as essential networks, primarily with much larger providers with who they could even enter into sub-contracts.
Hence, you will continuously be locked out of beneficial enterprise associations. Only set, if an business is not a taxpayer it can not develop!
Individualized tax and customs advisory solutions
These are companies provided by the Kenya Revenue Authority (KRA) by way of its huge network, social media, and telephony amid many others to hell MSMEs operators realize the tax and customs natural environment in particular if they intend to get into import and export small business.
This is in addition to current market and networking chances by means of its taxpayers’ roundtables that the taxman organizes to provide with each other enterprises for needs of sharing problems influencing them and getting organization tips in line with the main company of the authority.
It is for the duration of these conferences that the Authority avails prospects for entrepreneurs to community and even set up new marketplaces.
Import and export incentives
As a modest business enterprise operator, your target is to improve from serving the nearby persons to accomplishing company globally. No small business operator would their venture remain stagnant hence the want for registration.
MSMEs registered with the taxman stand the probability of obtaining import incentives that contain lessened import tariffs on inputs these types of as machinery and uncooked products to spur manufacturing of products for export where by the authority offers absolutely free VAT for its members.
The taxman also has a provision for money allowances on set up machinery and a probable 20 percent export compensation arrangement.
Quite a few business options
Did you know? In line with the govt directive on general public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, ladies, and people with disabilities which are generally MSMEs. One more rationale why you want to sign-up as a smaller enterprise operator.
Unregistered enterprises ought to sign-up as taxpayers in order to open doorways to business enterprise alternatives that can only be accessed after the small business acquires the all-crucial PIN variety.