Page 31 - Nine Yards Magazine 2021/2022 - Old Mutual Corporate

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THE NUMBER OF VC FUNDING DEALS SIGNED BY AFRICAN STARTUPS IN 2020
– Partech
Kelvin Wachira, co-founder and former CEO of BidiiBuild, a Nairobi-based startup that runs a platform for property developers managing building sites, praises the ease of registering a business in Kenya. ‘The fact that you can track the registration online makes it easier than other African countries,’ he says. ‘It is also a faster process and that is a bonus.’
The entrepreneur, who is an alumnus of the MEST
Africa programme, adds that the regulation is more straightforward and transparent than elsewhere in Africa. ‘In other countries on the continent, you can be running a startup and a government official who doesn’t like you will come and place an arbitrary tax on you. At least in Kenya you know what you are supposed to do and what you are not supposed to do,’ he says.
Kenya, in terms of regulation and tax, is generally thought to be one of Africa’s most free-market and liberal economies. Compared to South Africa, which has tough labour laws based on left-leaning governance, Kenya has a reputation for allowing companies to grow before the government introduces taxation.
However, even though the overall tax burden may indeed be less in Kenya, Kelvin argues that the tax regime can be just as unhelpful
for early-stage startups as elsewhere. In January 2021, the government introduced
a minimum income tax of 1% on all companies regardless of their size, which many believe may have a devastating impact on smaller companies.
‘They are killing startups before they even get started, you can’t tax someone who doesn’t have anything,’ he says.
startups keep going
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IMAGES: GALLO IMAGES/GETTY IMAGES.
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