Death and taxes. Both certain and both capable of evoking equal measures of despair. When tax season lumbers around, it’s hard enough to recount the cost of living lawfully, without the filing process being tedious and daunting. Take heart though, a South African startup called TaxTim is about to throw all your preconceptions about filing taxes out the window.
No ad to show here.
Launched in November of last year, TaxTim is an approachable, virtual tax assistant who helps you complete your tax return by asking you simple questions, in plain English. By answering Tim’s questions, you help him collect the information needed to fill out your tax return. With TaxTim’s guidance, you can then submit your completed tax return to the South African Revenue Service (SARS) eFiling system or print it to submit in person.
TaxTim first popped up on Ventureburn’s radar at Umbono, Google’s startup incubation project. We noted TaxTim as one of the most intriguing pitches of the event which introduced us to TaxTim’s founders (fathers) Evan Robinson, a self-described “inventor for life” and programmer with a biotechnology and biochemistry master’s degree at the University of Cape Town and Marc Sevitz, a chartered accountant — ex-KPMG and Totalserve — with local and international tax experience.
TaxTim was conceived when Sevitz was doing Robinson’s tax return in March 2011. When Robinson expressed frustration at his inability to complete his own tax return with confidence — despite having a tertiary education — Robinson and Sevitz set out to digitise the tax return rules and make them available online in a simple chat format, lead by a friendly digital character.
TaxTim has a clean, intuitive interface and it makes filing your tax return — dare I say it — fun. Progressing through the conversational style questioning is straightforward, with speech bubbles stacking on top of each other. Your progress is saved and you can easily go back to previous questions. Questions are clear, and at no point did I feel unsure of how to proceed. Tim does really well as a proxy for deciphering unnecessarily complex tax legislation.
Beyond simply helping you to file your taxes, TaxTim provides a valuable overview of the tax filing process, and does a great job as serving as a resource, especially for first time tax return filers.
Tim can carry on a bit though, a necessary evil that ensures no stone is left unturned, I believe. TaxTim isn’t free, either. Adding colour to the gloomy tax filing skies will set you back ZAR200 (about US$25), less a R30 (US$4) discount available to users that post to Twitter or Facebook with a promotional link.
Depending on how you see it, TaxTim is either cheap compared to consulting a tax practitioner, or expensive, since the SARS eFiling system — though substantially less flamboyant than Tim — will get the job done, and, it’s free. Note that you will have to register for SARS eFiling before using TaxTim.
Given TaxTim’s novel, faux human approach to filing online tax returns, it’s easy to see why the idea has found favour with financial backers. The startup received seed funding from Umbono to the tune of US$25 000 and secured a second round of funding through local angel investors and an international mentor, bringing TaxTim’s valuation up to ZAR1.8 million (about US$219 500).
Shareholders include Justin Stanford (4Di Capital), Permjot Valia (angel investor), a mysterious local benefactor and four legacy investors from Umbono programme.
What’s next for TaxTim? Multi-language support, a mobile version and international expansion with a focus on emerging African markets where the population’s tax savviness lies within the “sweet” zone — the tax system requires regular manual filing and people are interested in doing it themselves, but governments do not provide sufficient assistance. TaxTim is likely to continue to operate as an independent company, but will also explore the possibility of becoming a software vendor to revenue collectors.
Internationally, Robinson and Sevitz cites Intuit’s TurboTax as its biggest competition.
In a country with 50-million citizens and only five million tax payers, TaxTim is a welcome addition in not only educating prospective taxpayers, but making the process of filing tax returns dramatically less daunting.
TaxTim’s approach is rather brilliant and without a doubt makes it easier for people to better understand complicated tax jargon. It’s important to “understand tax before you can be good at tax,” concludes Sevitz.
Keep an eye on this one.