In his Eighth Point out of the Nation 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 system still a substantial quantity of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This means that much less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 % are micro-enterprises even though only 7.1 per cent and .7 p.c are modest and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their organizations is that they anxiety remaining subjected to high taxation that could close up consuming on their income.
Nevertheless, as you will quickly discover, there are numerous rewards that await unregistered MSME operators as taxpayers that including loans and govt solutions.
Bid for government contracts
As a registered small company operator as a taxpayer, you will be putting your self in the best position to bid and earn govt tenders and trade with the govt and non-govt establishments.
If your company is not registered, you cannot bid for authorities contracts or even spouse with other businesses to get edge of communal gains which includes very important networks, specifically with bigger firms with who they could even enter into sub-contracts.
Thus, you will consistently be locked out of useful business associations. Basically place, if an enterprise is not a taxpayer it are unable to expand!
Individualized tax and customs advisory solutions
These are expert services made available by the Kenya Earnings Authority (KRA) via its extensive community, social media, and telephony amid other people to hell MSMEs operators recognize the tax and customs ecosystem particularly if they intend to get into import and export organization.
This is in addition to industry and networking options by way of its taxpayers’ roundtables that the taxman organizes to deliver with each other firms for needs of sharing challenges impacting them and acquiring company information in line with the main organization of the authority.
It is during these conferences that the Authority avails options for entrepreneurs to community and even build new marketplaces.
Import and export incentives
As a small enterprise operator, your objective is to increase from serving the community men and women to doing company globally. No enterprise operator would their venture continue being stagnant consequently the need for registration.
MSMEs registered with the taxman stand the chance of acquiring import incentives that involve reduced import tariffs on inputs these as machinery and uncooked products to spur producing of products for export exactly where the authority provides free VAT for its users.
The taxman also has a provision for funds allowances on mounted machinery and a achievable 20 per cent export payment arrangement.
Quite a few enterprise prospects
Did you know? In line with the authorities directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, women, and people with disabilities which are largely MSMEs. A different explanation why you need to have to register as a modest company operator.
Unregistered enterprises must register as taxpayers in order to open doors to organization prospects that can only be accessed as soon as the organization acquires the all-critical PIN range.