In his Eighth Condition of the Nation Deal with on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system yet a enormous selection of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed related companies in Kenya.
This indicates that a lot less than 27 % of all corporations in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises though only 7.1 % and .7 percent are modest and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their organizations is that they concern getting subjected to high taxation that may conclusion up feeding on on their financial gain.
On the other hand, as you will before long uncover, there are several benefits that await unregistered MSME operators as taxpayers that like loans and federal government expert services.
Bid for govt contracts
As a registered tiny company operator as a taxpayer, you will be putting yourself in the very best placement to bid and acquire governing administration tenders and trade with the govt and non-govt establishments.
If your business enterprise is not registered, you can not bid for government contracts or even lover with other corporations to choose advantage of communal benefits together with essential networks, in particular with larger sized organizations with who they could even enter into sub-contracts.
Therefore, you will constantly be locked out of useful organization associations. Basically place, if an organization is not a taxpayer it cannot increase!
Individualized tax and customs advisory expert services
These are companies available by the Kenya Profits Authority (KRA) by its huge network, social media, and telephony among other folks to hell MSMEs operators comprehend the tax and customs setting specifically if they intend to get into import and export enterprise.
This is in addition to market place and networking possibilities through its taxpayers’ roundtables that the taxman organizes to convey with each other corporations for needs of sharing troubles impacting them and getting small business guidance in line with the main organization of the authority.
It is throughout these meetings that the Authority avails possibilities for entrepreneurs to network and even build new marketplaces.
Import and export incentives
As a tiny enterprise operator, your goal is to expand from serving the area people today to undertaking enterprise globally. No company operator would their undertaking continue to be stagnant therefore the need for registration.
MSMEs registered with the taxman stand the opportunity of receiving import incentives that incorporate minimized import tariffs on inputs these kinds of as machinery and raw elements to spur manufacturing of products for export in which the authority presents totally free VAT for its associates.
The taxman also has a provision for funds allowances on put in machinery and a achievable 20 per cent export compensation arrangement.
Many organization chances
Did you know? In line with the government directive on general public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and individuals with disabilities which are mainly MSMEs. Yet another motive why you require to register as a little company operator.
Unregistered enterprises should register as taxpayers in order to open up doors to company prospects that can only be accessed at the time the business acquires the all-crucial PIN variety.