In his Eighth Point out of the Country Tackle on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system but a big variety of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed identical firms in Kenya.
This indicates that less than 27 p.c of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises whilst only 7.1 % and .7 percent are small and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their enterprises is that they concern getting subjected to substantial taxation that may perhaps conclusion up consuming on their gain.
Having said that, as you will shortly learn, there are many gains that await unregistered MSME operators as taxpayers that which includes financial loans and federal government products and services.
Bid for government contracts
As a registered tiny organization operator as a taxpayer, you will be putting you in the ideal position to bid and win authorities tenders and trade with the federal government and non-governing administration institutions.
If your business is not registered, you cannot bid for govt contracts or even associate with other enterprises to choose gain of communal added benefits which include critical networks, in particular with more substantial corporations with who they could even enter into sub-contracts.
Therefore, you will repeatedly be locked out of beneficial small business associations. Only set, if an company is not a taxpayer it can’t develop!
Personalised tax and customs advisory solutions
These are solutions available by the Kenya Income Authority (KRA) as a result of its broad community, social media, and telephony between some others to hell MSMEs operators have an understanding of the tax and customs surroundings primarily if they intend to get into import and export organization.
This is in addition to current market and networking alternatives through its taxpayers’ roundtables that the taxman organizes to provide together enterprises for reasons of sharing concerns affecting them and receiving enterprise guidance in line with the core company of the authority.
It is during these meetings that the Authority avails alternatives for business owners to community and even set up new marketplaces.
Import and export incentives
As a tiny small business operator, your target is to develop from serving the nearby folks to carrying out business enterprise globally. No business enterprise operator would their undertaking continue to be stagnant that’s why the need for registration.
MSMEs registered with the taxman stand the possibility of obtaining import incentives that include reduced import tariffs on inputs this kind of as machinery and uncooked elements to spur manufacturing of goods for export exactly where the authority presents cost-free VAT for its members.
The taxman also has a provision for funds allowances on put in machinery and a attainable 20 percent export payment arrangement.
Various business enterprise alternatives
Did you know? In line with the governing administration directive on public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, girls, and folks with disabilities which are predominantly MSMEs. A further motive why you have to have to sign-up as a compact business enterprise operator.
Unregistered enterprises ought to register as taxpayers in purchase to open doors to small business options that can only be accessed at the time the enterprise acquires the all-crucial PIN range.