In his Eighth State of the Nation Deal with on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state nevertheless a huge number of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed related firms in Kenya.
This means that considerably less than 27 p.c of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises although only 7.1 per cent and .7 % are smaller and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their organizations is that they worry being subjected to high taxation that might close up eating on their gain.
However, as you will quickly uncover, there are a lot of positive aspects that await unregistered MSME operators as taxpayers that including loans and federal government expert services.
Bid for federal government contracts
As a registered tiny business operator as a taxpayer, you will be placing yourself in the finest place to bid and gain govt tenders and trade with the governing administration and non-federal government institutions.
If your small business is not registered, you simply cannot bid for federal government contracts or even companion with other companies to choose benefit of communal benefits including critical networks, in particular with much larger companies with who they could even enter into sub-contracts.
Therefore, you will continually be locked out of beneficial business associations. Simply put, if an enterprise is not a taxpayer it simply cannot increase!
Personalized tax and customs advisory providers
These are solutions offered by the Kenya Revenue Authority (KRA) by means of its huge network, social media, and telephony among the other individuals to hell MSMEs operators understand the tax and customs setting primarily if they intend to get into import and export business.
This is in addition to marketplace and networking alternatives by means of its taxpayers’ roundtables that the taxman organizes to bring collectively corporations for purposes of sharing difficulties affecting them and receiving organization information in line with the core business enterprise of the authority.
It is for the duration of these conferences that the Authority avails prospects for business people to network and even establish new markets.
Import and export incentives
As a modest organization operator, your aim is to grow from serving the community folks to carrying out small business globally. No enterprise operator would their undertaking stay stagnant consequently the have to have for registration.
MSMEs registered with the taxman stand the possibility of getting import incentives that incorporate lowered import tariffs on inputs these kinds of as machinery and uncooked components to spur production of products for export wherever the authority features free VAT for its associates.
The taxman also has a provision for funds allowances on installed equipment and a doable 20 p.c export compensation arrangement.
A lot of small business opportunities
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 people today with disabilities which are mostly MSMEs. One more reason why you will need to sign-up as a compact company operator.
Unregistered enterprises ought to register as taxpayers in purchase to open doorways to business enterprise chances that can only be accessed at the time the enterprise acquires the all-essential PIN amount.