In his Eighth Condition of the Nation Handle 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 overall economy yet a huge range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed comparable corporations in Kenya.
This indicates that fewer than 27 per cent of all firms in Kenya are registered. Out of these, 92.2 % are micro-enterprises while only 7.1 percent and .7 % are small and medium enterprises respectively.
The rationale some of the MSME operators give for not registering their firms is that they fear becoming subjected to significant taxation that may perhaps end up ingesting on their profit.
On the other hand, as you will before long discover, there are many benefits that await unregistered MSME operators as taxpayers that which include loans and federal government providers.
Bid for government contracts
As a registered small business operator as a taxpayer, you will be placing you in the finest situation to bid and acquire federal government tenders and trade with the authorities and non-govt institutions.
If your small business is not registered, you cannot bid for federal government contracts or even husband or wife with other firms to get advantage of communal gains which include vital networks, particularly with bigger firms with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of valuable organization associations. Merely put, if an organization is not a taxpayer it are not able to grow!
Personalized tax and customs advisory expert services
These are companies provided by the Kenya Profits Authority (KRA) through its vast community, social media, and telephony amongst others to hell MSMEs operators have an understanding of the tax and customs atmosphere especially if they intend to get into import and export business.
This is in addition to marketplace and networking chances by its taxpayers’ roundtables that the taxman organizes to provide together enterprises for uses of sharing issues affecting them and receiving business information in line with the core small business of the authority.
It is all through these conferences that the Authority avails chances for entrepreneurs to community and even build new marketplaces.
Import and export incentives
As a smaller small business operator, your objective is to grow from serving the nearby folks to carrying out company globally. No small business operator would their enterprise keep on being stagnant consequently the need to have for registration.
MSMEs registered with the taxman stand the chance of obtaining import incentives that involve decreased import tariffs on inputs such as machinery and uncooked materials to spur producing of items for export the place the authority features totally free VAT for its customers.
The taxman also has a provision for money allowances on installed equipment and a doable 20 percent export payment arrangement.
Various company chances
Did you know? In line with the authorities directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, gals, and individuals with disabilities which are generally MSMEs. Another reason why you will need to register as a modest enterprise operator.
Unregistered enterprises must register as taxpayers in get to open doorways to company prospects that can only be accessed at the time the business acquires the all-significant PIN number.