In his Eighth State of the Country 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 nevertheless a large amount of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed identical organizations in Kenya.
This usually means that a lot less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises although only 7.1 p.c and .7 % are smaller and medium enterprises respectively.
The cause some of the MSME operators give for not registering their firms is that they anxiety getting subjected to significant taxation that may close up taking in on their income.
Having said that, as you will quickly explore, there are lots of gains that await unregistered MSME operators as taxpayers that including financial loans and federal government solutions.
Bid for govt contracts
As a registered smaller small business operator as a taxpayer, you will be putting you in the best placement to bid and gain authorities tenders and trade with the govt and non-government institutions.
If your business is not registered, you are unable to bid for govt contracts or even spouse with other enterprises to acquire advantage of communal gains including critical networks, primarily with bigger companies with who they could even enter into sub-contracts.
Hence, you will continually be locked out of handy organization associations. Simply set, if an company is not a taxpayer it are unable to mature!
Customized tax and customs advisory expert services
These are providers provided by the Kenya Profits Authority (KRA) through its extensive network, social media, and telephony among others to hell MSMEs operators comprehend the tax and customs environment specially if they intend to get into import and export business.
This is in addition to sector and networking opportunities by its taxpayers’ roundtables that the taxman organizes to deliver collectively enterprises for applications of sharing difficulties influencing them and getting business guidance in line with the core organization of the authority.
It is through these meetings that the Authority avails options for business owners to network and even establish new markets.
Import and export incentives
As a smaller small business operator, your target is to increase from serving the neighborhood people to accomplishing organization globally. No organization operator would their venture continue to be stagnant therefore the want for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that involve reduced import tariffs on inputs this sort of as equipment and raw elements to spur production of items for export the place the authority delivers no cost VAT for its customers.
The taxman also has a provision for capital allowances on put in machinery and a attainable 20 per cent export payment arrangement.
Quite a few business enterprise opportunities
Did you know? In line with the federal government directive on community procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, girls, and persons with disabilities which are largely MSMEs. Another motive why you want to sign up as a tiny business operator.
Unregistered enterprises really should register as taxpayers in buy to open doorways to company chances that can only be accessed the moment the organization acquires the all-critical PIN range.