In his Eighth Point out of the Country Handle 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.
According to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed related enterprises in Kenya.
This means that considerably less than 27 percent of all organizations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises although only 7.1 p.c and .7 p.c are tiny and medium enterprises respectively.
The reason some of the MSME operators give for not registering their companies is that they fear becoming subjected to substantial taxation that could stop up eating on their profit.
Even so, as you will quickly learn, there are a lot of advantages that await unregistered MSME operators as taxpayers that which includes financial loans and governing administration providers.
Bid for government contracts
As a registered modest business enterprise operator as a taxpayer, you will be putting on your own in the greatest position to bid and get federal government tenders and trade with the govt and non-governing administration institutions.
If your business enterprise is not registered, you simply cannot bid for government contracts or even spouse with other enterprises to acquire edge of communal positive aspects including crucial networks, specifically with greater corporations with who they could even enter into sub-contracts.
Consequently, you will constantly be locked out of valuable business enterprise associations. Merely set, if an enterprise is not a taxpayer it simply cannot develop!
Personalised tax and customs advisory products and services
These are products and services offered by the Kenya Profits Authority (KRA) via its vast community, social media, and telephony amid many others to hell MSMEs operators fully grasp the tax and customs atmosphere particularly if they intend to get into import and export enterprise.
This is in addition to marketplace and networking alternatives by its taxpayers’ roundtables that the taxman organizes to deliver collectively corporations for uses of sharing difficulties influencing them and obtaining business enterprise information in line with the core business of the authority.
It is in the course of these conferences that the Authority avails possibilities for business owners to network and even establish new markets.
Import and export incentives
As a compact business enterprise operator, your intention is to improve from serving the area persons to doing organization globally. No enterprise operator would their venture remain stagnant hence the have to have for registration.
MSMEs registered with the taxman stand the chance of getting import incentives that include reduced import tariffs on inputs such as equipment and uncooked supplies to spur producing of goods for export in which the authority provides absolutely free VAT for its associates.
The taxman also has a provision for capital allowances on installed machinery and a probable 20 p.c export payment arrangement.
A lot of company options
Did you know? In line with the governing administration directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, women of all ages, and persons with disabilities which are predominantly MSMEs. Another rationale why you need to sign up as a small small business operator.
Unregistered enterprises really should sign up as taxpayers in order to open doorways to company alternatives that can only be accessed at the time the business enterprise acquires the all-essential PIN number.