In his Eighth State of the Nation Handle on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Modest, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy still a enormous number of them are unlicensed.
In accordance to the 2017 Economic Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed very similar enterprises in Kenya.
This suggests that considerably less than 27 p.c of all enterprises in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises although only 7.1 per cent and .7 p.c are modest and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their enterprises is that they worry being subjected to high taxation that could finish up taking in on their earnings.
Having said that, as you will soon find, there are many rewards that await unregistered MSME operators as taxpayers that together with financial loans and governing administration products and services.
Bid for governing administration contracts
As a registered modest business operator as a taxpayer, you will be putting you in the very best position to bid and gain federal government tenders and trade with the government and non-government institutions.
If your business is not registered, you are unable to bid for authorities contracts or even companion with other firms to acquire benefit of communal added benefits which includes vital networks, particularly with more substantial providers with who they could even enter into sub-contracts.
Hence, you will constantly be locked out of valuable business associations. Only set, if an business is not a taxpayer it can’t improve!
Individualized tax and customs advisory products and services
These are providers presented by the Kenya Earnings Authority (KRA) as a result of its huge community, social media, and telephony among the other people to hell MSMEs operators recognize the tax and customs surroundings primarily if they intend to get into import and export business.
This is in addition to industry and networking alternatives by means of its taxpayers’ roundtables that the taxman organizes to deliver jointly organizations for uses of sharing concerns impacting them and receiving business assistance in line with the core business of the authority.
It is for the duration of these meetings that the Authority avails options for entrepreneurs to network and even set up new marketplaces.
Import and export incentives
As a modest business operator, your aim is to improve from serving the community individuals to executing business globally. No business operator would their undertaking continue being stagnant hence the have to have for registration.
MSMEs registered with the taxman stand the likelihood of getting import incentives that consist of lowered import tariffs on inputs this sort of as equipment and raw supplies to spur producing of items for export where by the authority offers no cost VAT for its users.
The taxman also has a provision for cash allowances on put in equipment and a feasible 20 per cent export compensation arrangement.
A lot of business opportunities
Did you know? In line with the federal government directive on general public procurement, 30 % of all procurement at KRA goes to enterprises operate by the youth, ladies, and people with disabilities which are predominantly MSMEs. Another explanation why you have to have to sign-up as a smaller business operator.
Unregistered enterprises really should sign up as taxpayers in purchase to open doorways to business opportunities that can only be accessed at the time the business acquires the all-essential PIN selection.