Re: [kictanet] Australian Treasurer proposes 'Netflix Tax' for digital imports
I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h... I wish we were in any way close to this Mwendwa. On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote:
Thanks Moses for this.
Allow us to hijack the thread.
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.
Regards
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
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 On Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" <ultimateprogramer@gmail.com> wrote:
I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h...
I wish we were in any way close to this Mwendwa.
On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote:
Thanks Moses for this.
Allow us to hijack the thread.
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.
Regards
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer
swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
Its not about being practical or not Mwendwa. I personally know a good number of people who have not registered businesses solely because of overheads. But maybe that may not the point here. There are a couple of things that we take for granted in this argument. The most important being the role of the government in developing SMEs in the country through incentives and other vehicles. What Moses has raised is a concern that Australia has about supporting its local products. Frankly speaking the tech sector in Australia is as far advanced as it is in our dear country - we have not even talked about the strength of the economy in such a country to support a strong base of potential investors, who mind you, most are locals in Australia. The Indian case study outlines the story of a blooming Silicon Valley in India that the public sector is paying attention to in ways we are not even close with. Question then is: How is this level play field going to look like? On Wed, Feb 10, 2016 at 8:57 PM, Mwendwa Kivuva <Kivuva@transworldafrica.com
wrote:
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 On Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" < ultimateprogramer@gmail.com> wrote:
I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h...
I wish we were in any way close to this Mwendwa.
On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote:
Thanks Moses for this.
Allow us to hijack the thread.
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.
Regards
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer
swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
But Ahmed, how will we solve the problems without outlining them? The policy makers are here on the list waiting for us to give them the issues startups face, and possible solutions to the problem. On Feb 10, 2016 9:04 PM, "Ahmed Mohamed Maawy" <ultimateprogramer@gmail.com> wrote:
Its not about being practical or not Mwendwa. I personally know a good number of people who have not registered businesses solely because of overheads. But maybe that may not the point here. There are a couple of things that we take for granted in this argument. The most important being the role of the government in developing SMEs in the country through incentives and other vehicles.
What Moses has raised is a concern that Australia has about supporting its local products. Frankly speaking the tech sector in Australia is as far advanced as it is in our dear country - we have not even talked about the strength of the economy in such a country to support a strong base of potential investors, who mind you, most are locals in Australia. The Indian case study outlines the story of a blooming Silicon Valley in India that the public sector is paying attention to in ways we are not even close with.
Question then is: How is this level play field going to look like?
On Wed, Feb 10, 2016 at 8:57 PM, Mwendwa Kivuva < Kivuva@transworldafrica.com> wrote:
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 On Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" < ultimateprogramer@gmail.com> wrote:
I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h...
I wish we were in any way close to this Mwendwa.
On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote:
Thanks Moses for this.
Allow us to hijack the thread.
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.
Regards
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer
swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer
swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
Well.. for starters these issues are really not new.. studies have been done, experiments have been carried out, and models for how public sector can participate to foster innovative initiatives do exist and are shared. One of the most famous reports for instance compiled is the report by the World Bank called Innovation Within Cities – Policy Approaches to Grow Tech Startup Ecosystems and Increase Innovation in Cities <https://olc.worldbank.org/content/innovation-within-cities-%E2%80%93-policy-approaches-grow-tech-startup-ecosystems-and-increase>. So what do I think can be done? Well, this can be a collaborative discussion. But there needs to be a huge campaign to get public sector to be in tune with what other established economies are doing. We need to dig in, read, see, and have a panel of local experts who can fit the model to the local innovation sector context. Because I think its clearly visible that we need more participation in Innovative Initiatives by bodies in the public sector. With all the innovation buz in .ke, there is still loads more to be done. We are just getting started. The innovation affair in Kenya is a highly private sector driven initiative, and private and public need to merge to make that happen in harmony. Which is why I also believe Kictanet is a positive step to make such a platform come to life. On Wed, Feb 10, 2016 at 9:35 PM, Mwendwa Kivuva <Kivuva@transworldafrica.com
wrote:
But Ahmed, how will we solve the problems without outlining them? The policy makers are here on the list waiting for us to give them the issues startups face, and possible solutions to the problem. On Feb 10, 2016 9:04 PM, "Ahmed Mohamed Maawy" < ultimateprogramer@gmail.com> wrote:
Its not about being practical or not Mwendwa. I personally know a good number of people who have not registered businesses solely because of overheads. But maybe that may not the point here. There are a couple of things that we take for granted in this argument. The most important being the role of the government in developing SMEs in the country through incentives and other vehicles.
What Moses has raised is a concern that Australia has about supporting its local products. Frankly speaking the tech sector in Australia is as far advanced as it is in our dear country - we have not even talked about the strength of the economy in such a country to support a strong base of potential investors, who mind you, most are locals in Australia. The Indian case study outlines the story of a blooming Silicon Valley in India that the public sector is paying attention to in ways we are not even close with.
Question then is: How is this level play field going to look like?
On Wed, Feb 10, 2016 at 8:57 PM, Mwendwa Kivuva < Kivuva@transworldafrica.com> wrote:
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 On Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" < ultimateprogramer@gmail.com> wrote:
I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h...
I wish we were in any way close to this Mwendwa.
On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote:
Thanks Moses for this.
Allow us to hijack the thread.
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.
Regards
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer
swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer
swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
-- *Ahmed Maawy* Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer swahilibox.co.ke www.okfn.org <http://okfn.org/> startupgrind.com ajplus.net www.everylayer.com
Warm Greetings, The topic sitting at the centre of this (taxation of start-ups) conversation is corruption and its tentacle effect. A forming, small or big business will pay its reasonable taxes when the return is fair and even enables the business to thrive more. Otherwise, especially for small (people) start-ups, the tax/levies is perceived as kunyanyasa watu wadogo. What corruption breeds is that it gives unfair advantages to the bigger entities or more monied players who come into the industry (look around). This scares out the smaller businesses and the guys sitting on the sidelines mulling whether to register their business or not. The country is fueled through taxes (and other levies). Beyond the human potential not tapped, it is scary since the more the enterprises the more the potential for national development funds. That aside, tax breaks and tax incentives or special concessions have been applied in Kenya. Is this currently happening in mining, tourism - to incentivise foreign and big players?? It means that it is possible for start-ups, not withstanding the size and ownership. Blessed day. Regards/Wangari --- Pray God Bless. 2013Wangari circa - "Being of the Light, We are Restored Through Faith in Mind, Body and Spirit; We Manifest The Kingdom of God on Earth". On Wednesday, 10 February 2016, 21:58, Mwendwa Kivuva via kictanet <kictanet@lists.kictanet.or.ke> wrote: But Ahmed, how will we solve the problems without outlining them? The policy makers are here on the list waiting for us to give them the issues startups face, and possible solutions to the problem. On Feb 10, 2016 9:04 PM, "Ahmed Mohamed Maawy" <ultimateprogramer@gmail.com> wrote: Its not about being practical or not Mwendwa. I personally know a good number of people who have not registered businesses solely because of overheads. But maybe that may not the point here. There are a couple of things that we take for granted in this argument. The most important being the role of the government in developing SMEs in the country through incentives and other vehicles. What Moses has raised is a concern that Australia has about supporting its local products. Frankly speaking the tech sector in Australia is as far advanced as it is in our dear country - we have not even talked about the strength of the economy in such a country to support a strong base of potential investors, who mind you, most are locals in Australia. The Indian case study outlines the story of a blooming Silicon Valley in India that the public sector is paying attention to in ways we are not even close with. Question then is: How is this level play field going to look like? On Wed, Feb 10, 2016 at 8:57 PM, Mwendwa Kivuva <Kivuva@transworldafrica.com> wrote: 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 faceOn Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" <ultimateprogramer@gmail.com> wrote: I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h... I wish we were in any way close to this Mwendwa. On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote: Thanks Moses for this.Allow us to hijack the thread.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.Regards -- Ahmed Maawy Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer swahilibox.co.ke www.okfn.org startupgrind.com ajplus.net www.everylayer.com -- Ahmed Maawy Executive Director - SwahiliBox / M-Power (CBO) Ambassador - Open Knowledge Director - Startup Grind Mombasa Software Developer - AJ+ / EveryLayer (KE) +254 714 960 627 Skype: ultimateprogramer swahilibox.co.ke www.okfn.org startupgrind.com ajplus.net www.everylayer.com _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke https://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at https://lists.kictanet.or.ke/mailman/options/kictanet/wangarikabiru%40yahoo.... The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Hi Everyone, Tax-holidays / rebates is in my mind the wrong way to encourage more/better startups. * 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). * 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. * 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. * Tax-holidays for new companies could potentially create major tax-loopholes, with certain crafty business people re-starting their business every x years. Instead I think that we should look into other ways to incentivize startups * 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. o 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. o 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. o 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". o 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. * 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. o 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 ? o 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. * 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. * 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. .. Mike On 2/10/16 8:57 PM, Mwendwa Kivuva via kictanet wrote:
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
On Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" <ultimateprogramer@gmail.com <mailto:ultimateprogramer@gmail.com>> wrote:
I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h...
I wish we were in any way close to this Mwendwa.
On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com <mailto:lordmwesh@gmail.com>> wrote:
Thanks Moses for this.
Allow us to hijack the thread.
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.
Regards
Greetings Mike, Thank you for your great brief! I note that Maawy (Swahili Box) for whom this matter is a great thorn in the flesh is based/has activities in Mombasa as a hub. A region with vibrant economic activity whereby entrepreneurship (specifically formal entrepreneurship) by most of the public has not been the norm in the past, however we are seeing an awakening as in most parts of the country. As a hub with entrepreneurs, possibly they would also be dealing with the complexities of the new wave as entrepreneurs come for assistance at the hub yet the public service environment is still not conducive for start-ups. With the new County structure on top of the National Government, each County with its requirements, it is even more complicated. Certainly, business incubation becomes much easier when there is a focus on incentives and streamlining of processes, some of which you have recommend. Blessed day. Regards/Wangari --- Pray God Bless. 2013Wangari circa - "Being of the Light, We are Restored Through Faith in Mind, Body and Spirit; We Manifest The Kingdom of God on Earth". On Thursday, 11 February 2016, 0:06, Michael Pedersen via kictanet <kictanet@lists.kictanet.or.ke> wrote: Hi Everyone, Tax-holidays / rebates is in my mind the wrong way to encourage more/better startups. - 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). - 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. - 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. - Tax-holidays for new companies could potentially create major tax-loopholes, with certain crafty business people re-starting their business every x years. Instead I think that we should look into other ways to incentivize startups - 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. - 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. - 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. - 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". - 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. - 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. - 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 ? - 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. - 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. - 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. .. Mike On 2/10/16 8:57 PM, Mwendwa Kivuva via kictanet wrote: 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 On Feb 10, 2016 8:27 PM, "Ahmed Mohamed Maawy" <ultimateprogramer@gmail.com> wrote: I think we all understand how India is significantly ahead of us in matters technology. But still, read on: http://indiatoday.intoday.in/story/pm-modis-big-push-for-startups-3-yr-tax-h... I wish we were in any way close to this Mwendwa. On Wed, Feb 10, 2016 at 8:04 PM, Mwendwa Kivuva <lordmwesh@gmail.com> wrote: Thanks Moses for this. Allow us to hijack the thread. 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. Regards _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke https://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at https://lists.kictanet.or.ke/mailman/options/kictanet/wangarikabiru%40yahoo.... The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
On Thu, Feb 11, 2016 at 12:05 AM, Michael Pedersen via kictanet < kictanet@lists.kictanet.or.ke> wrote:
Hi Everyone,
Tax-holidays / rebates is in my mind the wrong way to encourage more/better startups.
- 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). - 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. - 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. - Tax-holidays for new companies could potentially create major tax-loopholes, with certain crafty business people re-starting their business every x years.
Instead I think that we should look into other ways to incentivize startups
- 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. - 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. - 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. - 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". - 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. - 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. - 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 ? - 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. - 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. - 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.
Micheal is right. Make it simpler for everyone to do business, stop looking for exceptions in the tax code. Tax incentives won't work - you'll get caught up in a political spiral. We are in an echo chamber as tech, so we only see our insular view. Farmers feed the country, think that what they are doing is important, hence they need tax breaks. Teachers educate the nation, schools as well, they should also get tax breaks. At the end of the day, a simple tax policy is more important than low taxation. -- Warm Regards, Phares Kariuki *E*: pkariuki@gmail.com | *Twitter*: kaboro |
participants (5)
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Ahmed Mohamed Maawy
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Michael Pedersen
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Mwendwa Kivuva
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Phares Kariuki
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WANGARI KABIRU