In his Eighth Condition of the Nation Deal with on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nevertheless a massive amount of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million certified MSMEs and 5.85 million unlicensed identical businesses in Kenya.
This suggests that considerably less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 percent and .7 % are smaller and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their corporations is that they anxiety remaining subjected to substantial taxation that may possibly end up taking in on their revenue.
On the other hand, as you will before long discover, there are several rewards that await unregistered MSME operators as taxpayers that which includes loans and governing administration providers.
Bid for govt contracts
As a registered modest organization operator as a taxpayer, you will be placing yourself in the most effective posture to bid and acquire federal government tenders and trade with the government and non-federal government institutions.
If your business is not registered, you are unable to bid for authorities contracts or even spouse with other corporations to choose advantage of communal added benefits such as important networks, especially with bigger providers with who they could even enter into sub-contracts.
For that reason, you will consistently be locked out of handy enterprise associations. Basically place, if an enterprise is not a taxpayer it are unable to mature!
Customized tax and customs advisory companies
These are providers available by the Kenya Revenue Authority (KRA) as a result of its broad community, social media, and telephony among other individuals to hell MSMEs operators realize the tax and customs surroundings primarily if they intend to get into import and export enterprise.
This is in addition to industry and networking possibilities as a result of its taxpayers’ roundtables that the taxman organizes to carry with each other firms for purposes of sharing challenges affecting them and getting organization assistance in line with the main enterprise of the authority.
It is in the course of these meetings that the Authority avails opportunities for business people to network and even establish new markets.
Import and export incentives
As a smaller small business operator, your target is to increase from serving the community people to executing small business globally. No business enterprise operator would their enterprise remain stagnant for this reason the have to have for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that contain decreased import tariffs on inputs such as equipment and raw components to spur producing of merchandise for export exactly where the authority provides absolutely free VAT for its members.
The taxman also has a provision for funds allowances on put in equipment and a attainable 20 p.c export compensation arrangement.
Numerous business options
Did you know? In line with the federal government directive on general public procurement, 30 p.c of all procurement at KRA goes to enterprises run by the youth, women of all ages, and individuals with disabilities which are generally MSMEs. Yet another explanation why you have to have to sign up as a little small business operator.
Unregistered enterprises ought to sign up as taxpayers in order to open doors to business enterprise options that can only be accessed when the organization acquires the all-significant PIN number.