Team BeFiler seeks to cash in on Pakistan’s ever-growing tax base.
Team BeFiler seeks to cash in on Pakistan’s ever-growing tax base.

The deadline for filing your tax returns is just around the corner, and if you have been delaying it since August, it’s a good idea to finally get to the task. I get it, the entire process is anxiety inducing with all those legal terms you have no idea about. How about I suggest something easier?

Meet, an online platform that lets you file your taxes on a user-friendly interface. Compared to the Federal Board of Revenue (FBR) Iris system where you feel like pulling out your hair, their portal is based on a simple, step-by-step questionnaire.

Sign up using CNIC, email address, number etc and choose between national tax number (NTN) registration or return filing. For the latter, it will ask you a series of questions, including salary and give deductible amount to be entered. Select all income streams applicable (salary/property etc), and input the values accordingly. Each answer determines the successive question, so for example if someone selects capital gains as one of the sources, their form would add additional queries compared to that for a salaried person.

Then move on to the wealth statement and reconciliation where the portal will highlight any inconsistencies, along with calculating deductible amounts for different classes of income. Once you are done with this entire process, make the payment using one of the many channels available, like bank cards, SimSim wallet etc. The NTN registration is priced at Rs800 while filing a return costs Rs2,500. BeFiler team will then review your return and finally submit it to the FBR.

Now that all of the procedural parts are addressed, you must be wondering why we need it in the first place. After all, the government has launched its own app called Tax Asaan with something quite similar and being a state project, it obviously has a lot more credibility. Why go for a third-party solution then? “There are some key differences that set us apart: first of all, our system has a review module. Plus, we cater beyond the salaried employees, which is Tax Asaan’s focus,” says BeFiler founder Akbar Tejani.

But the FBR app is free of cost and is backed by a government trying to aggressively push it down to taxpayers. I wonder how is it to have the tax body as your biggest competitor? “We actually see them as partners, in fact, we are trying to integrate with the FBR system and skip one step from our current cycle,” he continues.

Alright, forget filing it yourself, whatever the portal. This has been a job largely outsourced to lawyers and tax consultants, where the more seasonal ones charge around Rs2,000-3,000. Why then pay someone else roughly the same amount to do the job yourself, no matter how automated?

“Filing is actually a very tricky business: there are a lot of technicalities involved like in capital gains, different tax rates are applied for different years, then there are credits and advances and much more. So while the seasonal consultant will get you on the Active Taxpayer List, that would be the extent of it,” he explains. “Also, we don’t plan to keep the same rates: in fact we want to demonetise and charge only a nominal rate, much lower than what any lawyer is offering,” the founder adds.

BeFiler was launched around August 2018 by Akbar Tejani, a chartered accountant, along with Mudassir Jokhio and Zeeshan Bhatti, who look after the tech. And to this day, the startup has been financed internally in addition to winning an undisclosed grant from a financial innovation challenge. As for the income stream, it’s simple enough: a fee is charged per every return filed/NTN registered.

Perhaps the most important concern regarding BeFiler is around the usage and data security. This is no ride-hailing or food delivery app where even if the startup analyses your spending habits to recommend a related product to make an extra buck, you might not care too much.

Here, it’s your extremely personal information which is being shared in the most obvious manner. So what policies and safeguards does the startup have in place?

“We host our servers on RapidCompute, which is the safest cloud service available in Pakistan. Given the sensitivity of the data, we wanted to store it locally rather than Amazon Web Services or some other provider. As for usage, we are not utilising it for any other purpose,” Tejani claims.

One question that looms over is how seasonal this entire exercise of tax filing is. How does Tejani and co plan to keep their revenues sustainable in such a scenario?

“It’s actually not as seasonal as one would imagine: many people file their returns when buying an asset or opening a new account, which means a constant demand almost throughout the year. And that’s just from the salaried employees. On the side, we have added an small and medium enterprise module (which has an even more complicated structure) and are looking to expand in that segment. That will further smooth the demand since they have monthly withholding statements filing requirements as well,” he explains.

With government’s documentation drive in full force and only a few million filers currently, the market has a lot of potential to grow. Just last year, in fact, total the number of returns filed jumped by 68 per cent to 2.5 million with trajectory expected to only get steeper.

In such an environment, no matter how many competitors, BeFiler will have more than enough takers.

The writer is member of staff:

Twitter: @MutaherKhan

Published in Dawn, December 15th, 2019