In his Eighth Condition of the Nation Tackle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economic system still a massive range of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million accredited MSMEs and 5.85 million unlicensed related firms in Kenya.
This usually means that much less than 27 percent of all businesses in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises although only 7.1 per cent and .7 p.c are small and medium enterprises respectively.
The purpose some of the MSME operators give for not registering their companies is that they fear remaining subjected to higher taxation that may stop up having on their profit.
On the other hand, as you will shortly explore, there are numerous added benefits that await unregistered MSME operators as taxpayers that which include financial loans and govt companies.
Bid for federal government contracts
As a registered tiny company operator as a taxpayer, you will be placing you in the ideal situation to bid and win authorities tenders and trade with the governing administration and non-govt institutions.
If your business enterprise is not registered, you are not able to bid for governing administration contracts or even associate with other organizations to choose benefit of communal added benefits which include essential networks, specifically with much larger firms with who they could even enter into sub-contracts.
As a result, you will repeatedly be locked out of beneficial enterprise associations. Merely put, if an enterprise is not a taxpayer it are not able to mature!
Customized tax and customs advisory products and services
These are products and services made available by the Kenya Earnings Authority (KRA) by its extensive network, social media, and telephony amongst some others to hell MSMEs operators have an understanding of the tax and customs ecosystem specifically if they intend to get into import and export business enterprise.
This is in addition to industry and networking possibilities as a result of its taxpayers’ roundtables that the taxman organizes to carry alongside one another firms for purposes of sharing challenges influencing them and receiving business tips in line with the main business enterprise of the authority.
It is through these meetings that the Authority avails alternatives for entrepreneurs to network and even create new markets.
Import and export incentives
As a tiny small business operator, your aim is to develop from serving the neighborhood people today to doing enterprise globally. No business operator would their venture continue to be stagnant as a result the need to have for registration.
MSMEs registered with the taxman stand the chance of getting import incentives that incorporate lessened import tariffs on inputs these kinds of as machinery and uncooked products to spur producing of products for export wherever the authority gives free of charge VAT for its members.
The taxman also has a provision for funds allowances on mounted equipment and a feasible 20 p.c export payment arrangement.
Numerous organization chances
Did you know? In line with the govt directive on public procurement, 30 % of all procurement at KRA goes to enterprises run by the youth, females, and individuals with disabilities which are predominantly MSMEs. An additional motive why you need to have to register as a tiny business enterprise operator.
Unregistered enterprises ought to sign up as taxpayers in get to open doors to business options that can only be accessed at the time the business acquires the all-vital PIN amount.