In his Eighth State of the Country Tackle 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 substantial quantity of them are unlicensed.
According to the 2017 Economic Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related firms in Kenya.
This suggests that considerably less than 27 percent of all companies in Kenya are registered. Out of these, 92.2 % are micro-enterprises while only 7.1 p.c and .7 per cent are tiny and medium enterprises respectively.
The motive some of the MSME operators give for not registering their organizations is that they fear being subjected to higher taxation that could finish up consuming on their earnings.
However, as you will before long explore, there are many added benefits that await unregistered MSME operators as taxpayers that together with loans and authorities products and services.
Bid for governing administration contracts
As a registered small enterprise operator as a taxpayer, you will be placing yourself in the greatest situation to bid and win federal government tenders and trade with the authorities and non-federal government institutions.
If your small business is not registered, you are not able to bid for authorities contracts or even partner with other enterprises to consider edge of communal gains such as crucial networks, primarily with more substantial organizations with who they could even enter into sub-contracts.
Consequently, you will continuously be locked out of practical organization associations. Merely set, if an enterprise is not a taxpayer it simply cannot improve!
Customized tax and customs advisory expert services
These are companies presented by the Kenya Revenue Authority (KRA) through its extensive community, social media, and telephony among some others to hell MSMEs operators recognize the tax and customs ecosystem specifically if they intend to get into import and export enterprise.
This is in addition to market place and networking options as a result of its taxpayers’ roundtables that the taxman organizes to provide together enterprises for uses of sharing difficulties affecting them and acquiring company tips in line with the main enterprise of the authority.
It is throughout these meetings that the Authority avails prospects for business owners to network and even set up new markets.
Import and export incentives
As a compact business enterprise operator, your target is to increase from serving the nearby individuals to doing organization globally. No business operator would their undertaking continue being 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 such as equipment and uncooked components to spur producing of items for export the place the authority offers totally free VAT for its customers.
The taxman also has a provision for cash allowances on put in equipment and a attainable 20 p.c export payment arrangement.
Numerous business opportunities
Did you know? In line with the governing administration directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, gals, and folks with disabilities which are mostly MSMEs. A different rationale why you will need to register as a small business operator.
Unregistered enterprises need to register as taxpayers in get to open doorways to company chances that can only be accessed once the business enterprise acquires the all-vital PIN selection.