In his Eighth Condition of the Nation Deal with 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 but a substantial number of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable firms in Kenya.
This suggests that much less than 27 percent of all companies in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises though only 7.1 percent and .7 percent are small and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their enterprises is that they panic remaining subjected to significant taxation that may well finish up having on their income.
On the other hand, as you will soon find out, there are several added benefits that await unregistered MSME operators as taxpayers that including financial loans and govt providers.
Bid for authorities contracts
As a registered modest small business operator as a taxpayer, you will be placing by yourself in the best situation to bid and gain governing administration tenders and trade with the govt and non-authorities establishments.
If your company is not registered, you simply cannot bid for govt contracts or even lover with other enterprises to choose edge of communal rewards together with very important networks, especially with larger sized providers with who they could even enter into sub-contracts.
As a result, you will constantly be locked out of beneficial business enterprise associations. Only set, if an organization is not a taxpayer it can not mature!
Personalised tax and customs advisory solutions
These are services provided by the Kenya Income Authority (KRA) as a result of its extensive network, social media, and telephony among the other individuals to hell MSMEs operators understand the tax and customs setting specifically if they intend to get into import and export organization.
This is in addition to market and networking opportunities by way of its taxpayers’ roundtables that the taxman organizes to deliver with each other companies for uses of sharing troubles affecting them and receiving enterprise guidance in line with the main small business of the authority.
It is through these meetings that the Authority avails prospects for business owners to network and even build new markets.
Import and export incentives
As a smaller enterprise operator, your purpose is to increase from serving the area people to undertaking small business globally. No business enterprise operator would their enterprise continue being stagnant for this reason the want for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that contain lowered import tariffs on inputs these types of as machinery and raw components to spur manufacturing of products for export where the authority delivers no cost VAT for its users.
The taxman also has a provision for money allowances on mounted machinery and a attainable 20 percent export payment arrangement.
Numerous enterprise chances
Did you know? In line with the government directive on public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, women, and men and women with disabilities which are primarily MSMEs. A different explanation why you need to register as a little company operator.
Unregistered enterprises should sign-up as taxpayers in buy to open doorways to company alternatives that can only be accessed the moment the company acquires the all-crucial PIN range.