In his Eighth Condition of the Country Handle 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 financial system yet a massive amount of them are unlicensed.
According to the 2017 Financial Survey, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed related enterprises in Kenya.
This signifies that much less than 27 p.c of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 per cent and .7 per cent are little and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their organizations is that they panic becoming subjected to high taxation that may stop up eating on their revenue.
However, as you will before long learn, there are quite a few benefits that await unregistered MSME operators as taxpayers that which include loans and authorities companies.
Bid for government contracts
As a registered compact enterprise operator as a taxpayer, you will be placing oneself in the very best place to bid and get govt tenders and trade with the authorities and non-governing administration institutions.
If your small business is not registered, you are not able to bid for federal government contracts or even spouse with other firms to get benefit of communal benefits like important networks, particularly with more substantial businesses with who they could even enter into sub-contracts.
As a result, you will continually be locked out of practical business associations. Only place, if an business is not a taxpayer it can’t develop!
Customized tax and customs advisory solutions
These are companies provided by the Kenya Profits Authority (KRA) by way of its huge network, social media, and telephony between other folks to hell MSMEs operators understand the tax and customs natural environment specially if they intend to get into import and export business.
This is in addition to market and networking chances by means of its taxpayers’ roundtables that the taxman organizes to deliver alongside one another businesses for uses of sharing challenges influencing them and obtaining company assistance in line with the main company of the authority.
It is in the course of these conferences that the Authority avails opportunities for business owners to community and even build new marketplaces.
Import and export incentives
As a compact organization operator, your intention is to increase from serving the local people today to doing business enterprise globally. No business enterprise operator would their undertaking continue being stagnant hence the want for registration.
MSMEs registered with the taxman stand the opportunity of receiving import incentives that include diminished import tariffs on inputs such as machinery and raw elements to spur producing of goods for export in which the authority gives no cost VAT for its customers.
The taxman also has a provision for cash allowances on mounted machinery and a feasible 20 p.c export compensation arrangement.
A lot of small business chances
Did you know? In line with the governing administration directive on community procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, ladies, and persons with disabilities which are largely MSMEs. Yet another explanation why you will need to sign up as a modest business operator.
Unregistered enterprises should really sign up as taxpayers in get to open up doorways to business prospects that can only be accessed after the small business acquires the all-essential PIN range.