In his Eighth Point out of the Country Deal with on 30th Nov this 12 months, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Smaller, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial system still a substantial number of them are unlicensed.
In accordance to the 2017 Financial Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed very similar enterprises in Kenya.
This indicates that considerably less than 27 percent of all firms in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises when only 7.1 percent and .7 percent are small and medium enterprises respectively.
The motive some of the MSME operators give for not registering their businesses is that they worry remaining subjected to high taxation that could finish up eating on their income.
Even so, as you will quickly find, there are lots of rewards that await unregistered MSME operators as taxpayers that together with financial loans and federal government services.
Bid for authorities contracts
As a registered tiny business operator as a taxpayer, you will be placing you in the greatest posture to bid and get federal government tenders and trade with the federal government and non-authorities establishments.
If your enterprise is not registered, you are not able to bid for authorities contracts or even spouse with other businesses to take benefit of communal gains together with vital networks, specifically with more substantial businesses with who they could even enter into sub-contracts.
Hence, you will repeatedly be locked out of handy company associations. Simply put, if an business is not a taxpayer it can’t expand!
Personalized tax and customs advisory expert services
These are solutions available by the Kenya Income Authority (KRA) by means of its huge network, social media, and telephony among the other folks to hell MSMEs operators understand the tax and customs natural environment specially if they intend to get into import and export enterprise.
This is in addition to current market and networking chances by its taxpayers’ roundtables that the taxman organizes to provide jointly organizations for needs of sharing troubles influencing them and receiving business advice in line with the core organization of the authority.
It is all through these meetings that the Authority avails chances for business people to community and even build new marketplaces.
Import and export incentives
As a little organization operator, your goal is to expand from serving the area people today to doing small business globally. No organization operator would their venture stay stagnant for this reason the need to have for registration.
MSMEs registered with the taxman stand the opportunity of getting import incentives that consist of lowered import tariffs on inputs such as machinery and uncooked elements to spur production of goods for export exactly where the authority gives no cost VAT for its members.
The taxman also has a provision for funds allowances on put in equipment and a possible 20 per cent export payment arrangement.
Various enterprise opportunities
Did you know? In line with the federal government directive on public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women of all ages, and men and women with disabilities which are predominantly MSMEs. Yet another motive why you want to sign-up as a small organization operator.
Unregistered enterprises must sign up as taxpayers in order to open up doors to enterprise options that can only be accessed once the company acquires the all-essential PIN number.