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, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system yet a enormous variety of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed identical firms in Kenya.
This means that less than 27 % of all corporations in Kenya are registered. Out of these, 92.2 % are micro-enterprises whilst only 7.1 p.c and .7 p.c are compact and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their enterprises is that they anxiety getting subjected to significant taxation that might conclusion up eating on their income.
Even so, as you will before long discover, there are many advantages that await unregistered MSME operators as taxpayers that such as financial loans and govt services.
Bid for government contracts
As a registered little organization operator as a taxpayer, you will be placing your self in the most effective placement to bid and earn governing administration tenders and trade with the govt and non-governing administration establishments.
If your organization is not registered, you can not bid for federal government contracts or even lover with other corporations to acquire advantage of communal added benefits like important networks, in particular with larger sized organizations with who they could even enter into sub-contracts.
Therefore, you will continuously be locked out of helpful company associations. Simply just set, if an enterprise is not a taxpayer it can not increase!
Personalized tax and customs advisory companies
These are companies supplied by the Kenya Profits Authority (KRA) via its huge community, social media, and telephony amongst some others to hell MSMEs operators realize the tax and customs ecosystem especially if they intend to get into import and export small business.
This is in addition to current market and networking opportunities by way of its taxpayers’ roundtables that the taxman organizes to provide collectively companies for functions of sharing issues impacting them and getting company guidance in line with the main business enterprise of the authority.
It is throughout these meetings that the Authority avails opportunities for business people to community and even build new markets.
Import and export incentives
As a small business operator, your purpose is to improve from serving the local people to doing business enterprise globally. No organization operator would their undertaking continue being stagnant therefore the will need for registration.
MSMEs registered with the taxman stand the prospect of obtaining import incentives that involve reduced import tariffs on inputs these as equipment and raw components to spur manufacturing of items for export exactly where the authority gives totally free VAT for its associates.
The taxman also has a provision for cash allowances on mounted equipment and a doable 20 percent export payment arrangement.
Quite a few enterprise possibilities
Did you know? In line with the government directive on community procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, ladies, and individuals with disabilities which are primarily MSMEs. A different motive why you want to sign-up as a little small business operator.
Unregistered enterprises should really sign up as taxpayers in buy to open up doors to organization options that can only be accessed when the small business acquires the all-important PIN range.