In his Eighth State of the Country Handle on 30th Nov this yr, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Little, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state however a big number of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed equivalent enterprises in Kenya.
This indicates that fewer than 27 percent of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises while only 7.1 % and .7 percent are smaller and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their companies is that they panic remaining subjected to large taxation that may stop up feeding on on their financial gain.
Nonetheless, as you will quickly find out, there are lots of added benefits that await unregistered MSME operators as taxpayers that which include loans and government products and services.
Bid for government contracts
As a registered little small business operator as a taxpayer, you will be putting oneself in the best posture to bid and acquire authorities tenders and trade with the govt and non-federal government institutions.
If your company is not registered, you are unable to bid for authorities contracts or even associate with other firms to get benefit of communal rewards like important networks, especially with larger sized firms with who they could even enter into sub-contracts.
Thus, you will constantly be locked out of valuable enterprise associations. Merely set, if an enterprise is not a taxpayer it can’t grow!
Personalised tax and customs advisory expert services
These are products and services offered by the Kenya Profits Authority (KRA) by its extensive network, social media, and telephony among some others to hell MSMEs operators comprehend the tax and customs atmosphere specially if they intend to get into import and export business.
This is in addition to industry and networking prospects through its taxpayers’ roundtables that the taxman organizes to deliver with each other companies for reasons of sharing concerns influencing them and obtaining small business advice in line with the main organization of the authority.
It is through these meetings that the Authority avails options for entrepreneurs to community and even establish new markets.
Import and export incentives
As a compact enterprise operator, your aim is to develop from serving the community persons to accomplishing small business globally. No business operator would their undertaking continue to be stagnant as a result the have to have for registration.
MSMEs registered with the taxman stand the possibility of getting import incentives that include lessened import tariffs on inputs these types of as equipment and uncooked products to spur producing of products for export where the authority gives absolutely free VAT for its users.
The taxman also has a provision for capital allowances on mounted equipment and a achievable 20 per cent export compensation arrangement.
Many business enterprise alternatives
Did you know? In line with the government directive on public procurement, 30 p.c of all procurement at KRA goes to enterprises operate by the youth, women, and individuals with disabilities which are generally MSMEs. One more reason why you need to register as a compact small business operator.
Unregistered enterprises must sign-up as taxpayers in buy to open up doorways to small business options that can only be accessed at the time the company acquires the all-crucial PIN variety.