In his Eighth Condition of the Country Tackle on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nevertheless a substantial range of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related companies in Kenya.
This implies that much less than 27 percent of all firms in Kenya are registered. Out of these, 92.2 % are micro-enterprises when only 7.1 percent and .7 per cent are modest and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their companies is that they dread staying subjected to large taxation that may perhaps conclude up eating on their earnings.
Even so, as you will soon explore, there are quite a few added benefits that await unregistered MSME operators as taxpayers that which include loans and authorities providers.
Bid for govt contracts
As a registered small organization operator as a taxpayer, you will be placing yourself in the best posture to bid and acquire govt tenders and trade with the governing administration and non-federal government institutions.
If your business enterprise is not registered, you cannot bid for federal government contracts or even spouse with other firms to consider benefit of communal rewards which includes vital networks, in particular with larger providers with who they could even enter into sub-contracts.
As a result, you will constantly be locked out of useful business associations. Only put, if an organization is not a taxpayer it simply cannot expand!
Personalised tax and customs advisory solutions
These are companies presented by the Kenya Revenue Authority (KRA) via its wide community, social media, and telephony amid many others to hell MSMEs operators understand the tax and customs environment particularly if they intend to get into import and export company.
This is in addition to sector and networking chances by way of its taxpayers’ roundtables that the taxman organizes to convey collectively firms for reasons of sharing difficulties affecting them and acquiring enterprise assistance in line with the core company of the authority.
It is for the duration of these conferences that the Authority avails options for entrepreneurs to community and even create new markets.
Import and export incentives
As a small small business operator, your aim is to grow from serving the nearby men and women to executing company globally. No small business operator would their undertaking continue to be stagnant for this reason the need to have for registration.
MSMEs registered with the taxman stand the prospect of getting import incentives that include things like reduced import tariffs on inputs these types of as equipment and uncooked products to spur manufacturing of merchandise for export wherever the authority features free of charge VAT for its users.
The taxman also has a provision for cash allowances on installed machinery and a doable 20 per cent export compensation arrangement.
Quite a few enterprise possibilities
Did you know? In line with the govt directive on public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, gals, and individuals with disabilities which are generally MSMEs. Another purpose why you want to sign-up as a little business operator.
Unregistered enterprises ought to sign up as taxpayers in buy to open up doors to organization options that can only be accessed once the small business acquires the all-significant PIN variety.