In his Eighth Point out of the Country Deal with on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic climate however a large number of them are unlicensed.
In accordance to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed similar companies in Kenya.
This means that fewer than 27 per cent of all enterprises in Kenya are registered. Out of these, 92.2 % are micro-enterprises when only 7.1 p.c and .7 p.c are little and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their firms is that they concern staying subjected to substantial taxation that may perhaps end up consuming on their earnings.
Having said that, as you will before long discover, there are many positive aspects that await unregistered MSME operators as taxpayers that together with loans and governing administration solutions.
Bid for federal government contracts
As a registered little business operator as a taxpayer, you will be putting you in the ideal place to bid and get federal government tenders and trade with the authorities and non-federal government establishments.
If your business enterprise is not registered, you can not bid for government contracts or even husband or wife with other organizations to take advantage of communal added benefits like important networks, especially with bigger organizations with who they could even enter into sub-contracts.
Hence, you will constantly be locked out of useful business associations. Merely set, if an company is not a taxpayer it can’t improve!
Individualized tax and customs advisory companies
These are solutions provided by the Kenya Revenue Authority (KRA) as a result of its large network, social media, and telephony amongst other folks to hell MSMEs operators understand the tax and customs natural environment specially if they intend to get into import and export company.
This is in addition to industry and networking prospects by its taxpayers’ roundtables that the taxman organizes to bring alongside one another firms for purposes of sharing troubles impacting them and getting company assistance in line with the core business enterprise of the authority.
It is throughout these conferences that the Authority avails alternatives for entrepreneurs to community and even establish new marketplaces.
Import and export incentives
As a compact company operator, your target is to develop from serving the area individuals to carrying out organization globally. No company operator would their undertaking continue being stagnant for this reason the have to have for registration.
MSMEs registered with the taxman stand the probability of acquiring import incentives that involve reduced import tariffs on inputs this sort of as machinery and raw components to spur production of products for export in which the authority gives no cost VAT for its users.
The taxman also has a provision for capital allowances on set up equipment and a feasible 20 per cent export compensation arrangement.
Quite a few business enterprise opportunities
Did you know? In line with the governing administration directive on community procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, ladies, and men and women with disabilities which are predominantly MSMEs. A further cause why you need to register as a smaller small business operator.
Unregistered enterprises ought to sign up as taxpayers in order to open doors to organization options that can only be accessed the moment the business acquires the all-vital PIN selection.