In his Eighth Point out of the Nation Deal with on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nevertheless a substantial variety of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed very similar enterprises in Kenya.
This means that fewer than 27 percent of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 p.c and .7 p.c are small and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their organizations is that they fear getting subjected to substantial taxation that may well end up eating on their gain.
Even so, as you will soon learn, there are numerous rewards that await unregistered MSME operators as taxpayers that such as loans and govt products and services.
Bid for government contracts
As a registered compact business enterprise operator as a taxpayer, you will be putting your self in the very best placement to bid and gain authorities tenders and trade with the authorities and non-federal government institutions.
If your enterprise is not registered, you can’t bid for governing administration contracts or even associate with other organizations to get advantage of communal positive aspects together with critical networks, especially with larger sized organizations with who they could even enter into sub-contracts.
Therefore, you will continually be locked out of helpful business associations. Simply just put, if an business is not a taxpayer it can not increase!
Customized tax and customs advisory expert services
These are providers available by the Kenya Earnings Authority (KRA) by means of its wide network, social media, and telephony among other people to hell MSMEs operators fully grasp the tax and customs surroundings particularly if they intend to get into import and export organization.
This is in addition to market and networking alternatives by its taxpayers’ roundtables that the taxman organizes to convey alongside one another organizations for reasons of sharing troubles influencing them and receiving enterprise tips in line with the main business of the authority.
It is throughout these meetings that the Authority avails alternatives for entrepreneurs to community and even create new markets.
Import and export incentives
As a little business enterprise operator, your target is to grow from serving the community folks to undertaking business enterprise globally. No business operator would their venture keep on being stagnant for this reason the need to have for registration.
MSMEs registered with the taxman stand the opportunity of acquiring import incentives that contain decreased import tariffs on inputs these kinds of as machinery and raw materials to spur production of merchandise for export where the authority gives absolutely free VAT for its members.
The taxman also has a provision for money allowances on mounted machinery and a doable 20 % export payment arrangement.
A lot of business prospects
Did you know? In line with the govt directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and men and women with disabilities which are mainly MSMEs. A further motive why you want to sign up as a smaller enterprise operator.
Unregistered enterprises really should register as taxpayers in buy to open doors to enterprise chances that can only be accessed as soon as the company acquires the all-significant PIN number.