The state recently announced plans to collect Sh2.8 trillion in taxes from MSMEs.
They, however, admit in the 2023 Draft Budget Policy Statement that one major challenge is the expansion of the tax base.
Some MSMEs are playing a game of catch-me-if-you-can, but to be honest, can we blame them?
Registering a company for your micro business on the registry platform costs between Sh10,000 and Sh25,000. So most traders register a business name at Sh2,500 and get down to work. The next step, registering a trade mark, needs a steep Sh12,000.
It’s not all bad news, though. The Kenya Industrial Property Institute (KIPI) and the World Intellectual Property Organisation (WIPO) launched the Inventor Assistance Program, where MSMEs can register their patents for free for those below 35 years of age.
This is truly revolutionary, though the programme needs the full support of the state to lift the cap on age. For the next three years, we should double down on free registration of MSME companies as Rwanda is doing.
We should begin facilitating the cost and security of our people’s creativity and innovations. Our very own David Gathu and Moses Kinyua invented the world’s first bio-robotic arm, which is operated by brain signals.
Has the government offered this world-first invention all the help it needs? Is the device’s patent properly registered for the inventors’ protection? These inventors should be helped to do more.
Thomas Edison had more than 1,000 and Elon Musk’s Tesla company is said to currently have more than 3,000 active patents.
The process of patent registration should be streamlined and simplified and the limitations of cost eliminated so that visionary minds are set free to follow their passions and invent solutions for our day-to-day lives, including food security.
American agricultural scientist George Washington Carver invented 300 products that could be derived from peanuts such as ink, paints and dyes and a type of gasoline that could be derived from sweet potatoes.
KALRO, for instance, is doing a great job in the area of research. Others should make use of such findings to come up with innovative products to make Kenya not only food secure but also a mass producer.
Patents the world over are quickly forming part of the company portfolio during valuation. The Kenya Kwanza government should help Kenyans to invest in themselves and their businesses.
Free registration of 100 per cent Kenyan-owned MSME companies and inventor patents will help in creating a business environment where payment of taxes has tangible benefits for small businesses and hopefully this will translate to downstream collections for KRA. Other safeguards can also be included to ensure tax compliance.
Kenyans who take up business loans need the funds to go directly to their goods or services and not high patent registration fees. Is this a consideration Treasury would be willing to make considering the mounting cost of living and higher taxes we are set to pay in the coming year? If not, the game of catch-me-if-you-can will only get more protracted.
Patricia Njirwa is an advocate of the High Court; @PatriciaNjirwa