In his Eighth Point out of the Country Address on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s economy still a massive variety of them are unlicensed.
In accordance to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed very similar firms in Kenya.
This usually means that considerably less than 27 percent of all companies in Kenya are registered. Out of these, 92.2 p.c are micro-enterprises while only 7.1 p.c and .7 p.c are little and medium enterprises respectively.
The explanation some of the MSME operators give for not registering their firms is that they anxiety currently being subjected to significant taxation that might stop up having on their earnings.
Having said that, as you will shortly explore, there are many positive aspects that await unregistered MSME operators as taxpayers that which include financial loans and governing administration solutions.
Pray for governing administration contracts
As a registered little organization operator as a taxpayer, you will be placing oneself in the greatest placement to bid and earn authorities tenders and trade with the govt and non-government institutions.
If your business is not registered, you are not able to bid for authorities contracts or even lover with other companies to consider advantage of communal rewards like essential networks, primarily with much larger providers with who they could even enter into sub-contracts.
For that reason, you will continuously be locked out of valuable business associations. Basically set, if an enterprise is not a taxpayer it cannot improve!
Customized tax and customs advisory products and services
These are expert services presented by the Kenya Earnings Authority (KRA) by its wide community, social media, and telephony among the other individuals to hell MSMEs operators comprehend the tax and customs atmosphere particularly if they intend to get into import and export company.
This is in addition to current market and networking opportunities as a result of its taxpayers’ roundtables that the taxman organizes to carry together corporations for reasons of sharing concerns impacting them and obtaining enterprise suggestions in line with the main business of the authority.
It is all through these conferences that the Authority avails possibilities for entrepreneurs to community and even set up new markets.
Import and export incentives
As a little business operator, your purpose is to expand from serving the nearby people today to doing business globally. No business enterprise operator would their enterprise keep on being stagnant therefore the have to have for registration.
MSMEs registered with the taxman stand the likelihood of obtaining import incentives that incorporate minimized import tariffs on inputs such as machinery and uncooked elements to spur producing of merchandise for export where the authority features totally free VAT for its customers.
The taxman also has a provision for cash allowances on set up equipment and a probable 20 p.c export compensation arrangement.
Many business possibilities
Did you know? In line with the government directive on community procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, women of all ages, and men and women with disabilities which are mainly MSMEs. Another rationale why you need to have to register as a compact company operator.
Unregistered enterprises must sign-up as taxpayers in order to open doorways to business opportunities that can only be accessed the moment the small business acquires the all-significant PIN range.
Top 10 Principles for Positive Business Ethics
The Entrepreneurs Key to Success
How Ethical Leaders Set an Example