In his Eighth State of the Country Address on 30th Nov this year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Tiny, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s overall economy however a large number of them are unlicensed.
According to the 2017 Economic Survey, there are about 1.56 million certified MSMEs and 5.85 million unlicensed comparable organizations in Kenya.
This indicates that less than 27 p.c of all businesses in Kenya are registered. Out of these, 92.2 per cent are micro-enterprises even though only 7.1 per cent and .7 per cent are tiny and medium enterprises respectively.
The motive some of the MSME operators give for not registering their corporations is that they panic currently being subjected to large taxation that might conclude up ingesting on their financial gain.
Even so, as you will quickly explore, there are lots of positive aspects that await unregistered MSME operators as taxpayers that together with financial loans and governing administration solutions.
Bid for authorities contracts
As a registered small small business operator as a taxpayer, you will be putting by yourself in the best position to bid and earn governing administration tenders and trade with the federal government and non-governing administration establishments.
If your business enterprise is not registered, you simply cannot bid for governing administration contracts or even associate with other corporations to take advantage of communal gains including essential networks, specially with greater corporations with who they could even enter into sub-contracts.
As a result, you will continuously be locked out of helpful company associations. Simply put, if an company is not a taxpayer it can not increase!
Personalized tax and customs advisory companies
These are providers provided by the Kenya Earnings Authority (KRA) as a result of its large community, social media, and telephony among the others to hell MSMEs operators fully grasp the tax and customs ecosystem especially if they intend to get into import and export business enterprise.
This is in addition to market place and networking possibilities through its taxpayers’ roundtables that the taxman organizes to carry collectively enterprises for applications of sharing concerns impacting them and receiving enterprise guidance in line with the main enterprise of the authority.
It is during these conferences that the Authority avails possibilities for business owners to network and even create new marketplaces.
Import and export incentives
As a tiny organization operator, your objective is to develop from serving the neighborhood people today to accomplishing business globally. No small business operator would their venture continue being stagnant for this reason the will need for registration.
MSMEs registered with the taxman stand the likelihood of receiving import incentives that contain lowered import tariffs on inputs these types of as machinery and uncooked resources to spur producing of products for export the place the authority delivers free of charge VAT for its members.
The taxman also has a provision for cash allowances on mounted equipment and a probable 20 % export compensation arrangement.
Several company chances
Did you know? In line with the governing administration directive on public procurement, 30 percent of all procurement at KRA goes to enterprises run by the youth, women of all ages, and folks with disabilities which are mainly MSMEs. One more cause why you will need to register as a tiny enterprise operator.
Unregistered enterprises must sign up as taxpayers in purchase to open up doors to business enterprise chances that can only be accessed the moment the business enterprise acquires the all-essential PIN number.