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<div class="moz-cite-prefix">Hi Everyone,<br>
<br>
Tax-holidays / rebates is in my mind the wrong way to encourage
more/better startups.<br>
<ul>
<li>A startup generally invests a lot into the company in the
initial years, and only later once the company has grown does
it start making a (proper) profit, and since tax's are
calculated based on profit a initial tax-holiday has very
little impact (unless you have a smash hit from day one - in
which case it matters little anyway).<br>
</li>
<li>International stakeholders (World-bank ?) strongly encourage
fewer and fewer exceptions to tax-laws, so to ensure as wide a
tax-base as possible, afaik this was one of the main
motivations for the recent revision of the VAT act where most
exemptions and zero-ratings was removed. So there is strong
resistance to introducing new exemptions.<br>
</li>
<li>Tax-holidays are politically hot-potatoes, every politician
will argue that the special interest they are representing
should have a tax-holiday, hence getting an agreement/majority
vote to actually pass one for any area is highly unlikely.</li>
<li>Tax-holidays for new companies could potentially create
major tax-loopholes, with certain crafty business people
re-starting their business every x years.<br>
</li>
</ul>
<br>
Instead I think that we should look into other ways to incentivize
startups<br>
<ul>
<li>Lower the administrative overhead of being in the "formal"
sector, this will benefit every company but startups/SME's in
particular as the overhead is a larger burden for these. Also
it will be beneficial for all companies going forward and not
just a few for a limited time.</li>
<ul>
<li>Combine payment collections, so that as a company you only
have to perform ONE payment ONE place every month, then the
various stakeholders could (easily) split the collected
revenue in accordance with the supplied returns.</li>
<li>Review, simplify and unify the various returns required,
When doing returns regarding employees some stakeholders ask
for First, Middle, Last names, others for First and Other
names etc. In short each individual stakeholder is asking
for the "same" information but each in their own
structure/format, this makes it difficult to "copy-paste"
information from one return to the other and wastes time as
you have to maintain the same information in multiple
formats.<br>
</li>
<li>Look for ways to reduce the amount of required
"registrations", why is it that when you hire your first
employee you have to register with KRA that you have a PAYE
obligation, you have to register with both NHIF, NSSF, and
NITA as an employer, WHY can't you just register ONE PLACE
saying "We are now employers".</li>
<li>Encourage/enable stakeholders to work better together, why
is it required that you provide the same information over
and over again to each stakeholder in triplet copies.
Example: Allow banks to pull registration information from
the company registry for KYC requirements so that one does
not need to bring 100 copies of everything just to open a
bank-account or similar. <br>
</li>
</ul>
<li>Lower the learning curve for newly started companies, as a
startup you have more than enough to learn / deal with, make
the compliance part as painless as possible.</li>
<ul>
<li>Huduma centers are a great start as a single point of
entry, but it would be even better to reduce the amount of
compliance hoops needed to start with. Example my "startup"
is in it's 5th year - every year without exception we have
learned of a new stakeholder who we also are supposed to
register with and report to, meaning that until we learned
of it (often by accident) we were not compliant with that
particular stakeholder. Why can't the individual
(governmental) stakeholders automatically be notified about
newly registered companies and reach out ?</li>
<li>Ensure that EVERY government agency maintains and UPDATES
a "are you a new company guide" on their website - which in
detail explains how to be compliant with that particular
agency, and most importantly exactly which documents are
required for each process - did I mention: keep it UPDATED.<br>
</li>
</ul>
<li>Offer "startup packages" to newly started companies - offer
e.g. 10hours of professional services from auditors / lawyers
free or subsidized, this will make it much easier for a newly
started company to get the advice needed to start in the right
direction.</li>
<li>Figure out some sort of mentor structure where newly started
companies are assigned some seasoned administrator to advice
them on how to structure and deal with all the overhead. <br>
</li>
</ul>
<br>
..<br>
Mike<br>
<br>
<br>
On 2/10/16 8:57 PM, Mwendwa Kivuva via kictanet wrote:<br>
</div>
<blockquote
cite="mid:CAEhPqwq=kBDVBOZuuUBCFAxUgdzcTO8bCqCJ-isr+-NgmWM=mQ@mail.gmail.com"
type="cite">
<p dir="ltr">Ahmed, On a practical note, I would wish to see a
list of the taxes that hinder the growth of startups. That way,
we may point to policy makers the impediments the next Google or
Whatsapp in Kenya will face</p>
<div class="gmail_quote">On Feb 10, 2016 8:27 PM, "Ahmed Mohamed
Maawy" <<a moz-do-not-send="true"
href="mailto:ultimateprogramer@gmail.com">ultimateprogramer@gmail.com</a>>
wrote:<br type="attribution">
<blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">
<div dir="ltr">
<div>I think we all understand how India is significantly
ahead of us in matters technology. But still, read on: <a
moz-do-not-send="true"
href="http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-holiday-rs-10-000-crore-fund/1/572377.html"
target="_blank"><a class="moz-txt-link-freetext" href="http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-holiday-rs-10-000-crore-fund/1/572377.html">http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-holiday-rs-10-000-crore-fund/1/572377.html</a></a><br>
<br>
</div>
I wish we were in any way close to this Mwendwa.<br>
</div>
<div class="gmail_extra"><br>
<div class="gmail_quote">On Wed, Feb 10, 2016 at 8:04 PM,
Mwendwa Kivuva <span dir="ltr"><<a
moz-do-not-send="true"
href="mailto:lordmwesh@gmail.com" target="_blank"><a class="moz-txt-link-abbreviated" href="mailto:lordmwesh@gmail.com">lordmwesh@gmail.com</a></a>></span>
wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">
<p dir="ltr">Thanks Moses for this.</p>
<p dir="ltr">Allow us to hijack the thread.</p>
<p dir="ltr">Ahmed Maawy, what are these taxes you are
talking about? Most governments have hundreds of
taxes, considering even to bury someone attracts
levies. I've heard this line of reasoning for a while.
Maybe we can try to debunk it.</p>
<p dir="ltr">Regards </p>
</blockquote>
</div>
<br>
<br>
</div>
</blockquote>
</div>
</blockquote>
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