Online tax filing portal Befiler has announced a $1.5 million seed raise from international and local investors, the company announced in a statement today.
The round was co-led by US-based Cistech Capital and Pakistan’s Lakson Venture Capital (LVC), along with participation from local investors. Befiler has earlier received a Rs3 million grant from the State Bank of Pakistan (SBP) as part of the central bank’s Innovation Challenge Facility (ICF) for Digital Financial Services.
Siemens Malaysia appoints Tindaro Danze as new President & CEO
The process of filing tax returns directly with the Federal Board of Revenue (FBR) is cumbersome, requiring knowledge about how taxes work, the information that needs to be reconciled and then submitting that information at the tech-based platform of the FBR. There are two hurdles in this process: knowledge about how taxation works and financial literacy is low, and a majority of the people are not reasonably tech savvy to be able to file their returns online directly with the FBR.
As a consequence, people end up turning to lawyers to file their tax returns for them against a fee. Except that in this case, the fees could run in a few thousand rupees.
Etihad Airways celebrates flying 10 millionth passenger in 2022
Befiler is gunning to solve this problem that if people face complications in filing tax returns directly with FBR, the app makes it easier for them by collecting very basic information on the app and making calculations easy, and using in-house representatives throughout the process to make filing easier. And it does so by charging a fee that would be less than what a lawyer would charge.
In fact, Befiler is hoping that with such mechanism in place, at least those people that do not file tax returns because of these reasons would be encouraged to do so.
“From scratch, tax laws have been incorporated so that a user does not have to worry about them,” says Akbar Tejani, the founder and CEO of Befiler told Profit. “A simple question like what is the salary and how much tax has been deducted from that, and the resulting impact on the wealth in terms of tax credit, all that is taken care of in the portal.”
U Microfinance Bank inaugurates its 254th branch situated at Bahadurabad – Karachi
The other problem with filing directly with the FBR, which Befiler says it mitigates, is accuracy. While filing returns in the FBR’s systems, any inaccuracy can lead to notices from the FBR. On the other hand, Befiler is focused on decreasing the inaccuracies to begin with reducing the chances of FBR haunting a filer because of these inaccuracies.
But since its launch in 2019, Befiler has been able to accumulate over 20,000 active taxpayers on the platform – a slow growth trajectory while Pakistan’s active taxpayers stand at 3.38 million. The startup, however, says it has 460,000 users that use other services like advisory and company incorporation in the US beside filing tax returns.
USC providing subsidised items under PM’s relief package
In its defence, Befiler is unlike your eCommerce startups that users can order products from on a recurring basis.
Filing returns happens only once a year in a country where people are usually reluctant to pay direct taxes. The higher income groups, on the other hand, hire professional consultants to manage their finances who find ways around taxation and file returns for them.
Any growth would be slow and not based on discounts, but rather through word of mouth or other marketing efforts. Befiler has, therefore, been a startup that has been focused on controlling burn, generating better unit economics, as Akbar says.
“We are focusing on increasing retention and reducing cost of acquisition to keep our unit economics positive. We understand that times are tough and we have managed to keep growing at a level that burn is controlled and it does not come at the cost of sustainability,” says Akbar.
The initial round of funding for the startup comes after a period of over three years while startups in Pakistan have been aggressively raising funds. According to Akbar, fundraising late was to avoid any major dilution during early stages of the startup.
“Earlier, it was just an idea and investors would have been taking most of the risk which would have led to major dilution for founders. We wanted to avoid that. Now that we have proven this to be workable, we have raised the round,” Akbar says.
According to Akbar, the round was raised at a good valuation, which was not disclosed to Profit.
The company plans to spend the $1.5 million on expansion, with a sizeable chunk going towards product development and adding new product offerings.
The startup further plans to enter into partnerships with corporates and business associations to increase documentation and tax compliance.
You might also like
- Zong Partners with WWF to Protect Endangered Indus River Dolphin
Corporate‑Community Alliance Boosts Conservation of Pakistan’s Rare Freshwater Dolphin ISLAMABAD – Zong, Pakistan’s leading technology services enterprise, has joined hands with WWF‑Pakistan to advance conservation of the endangered Indus River Dolphin,… Read more: Zong Partners with WWF to Protect Endangered Indus River Dolphin - Two Chitrali Youth Killed in Dubai Stabbing Incident
Tragic Loss: Amiruddin and Mumtaz Ahmed Fatally Attacked in Dubai DUBAI: A tragic incident has been reported in Dubai, where two young men from Lower Chitral lost their lives on Sunday… Read more: Two Chitrali Youth Killed in Dubai Stabbing Incident - Mastercard supports an SME initiative with Jarir in Saudi Arabia
Riyadh, Saudi Arabia – Mastercard is supporting a first-of-its-kind initiative involving Jarir in Saudi Arabia that provides Mastercard SME cardholders with access to discounts on products via Jarir e-commerce platform in… Read more: Mastercard supports an SME initiative with Jarir in Saudi Arabia - Emirates Hits 100 Aircraft Milestone in Global Retrofit Programme
Airline Completes Landmark Cabin Upgrades on A380s and Boeing 777s DUBAI: Emirates has marked a major milestone in its ambitious retrofit programme, completing the refurbishment of 100 aircraft — the largest… Read more: Emirates Hits 100 Aircraft Milestone in Global Retrofit Programme - Bata India Hits 2,000 Stores, Sets 3,000-Outlet Target With Focus on Tier III-IV and Digital Growth
Bata India has crossed 2,000 stores and plans to expand to 3,000 outlets, targeting growth in Tier III and IV towns through franchising. India, which accounts for nearly 20% of the… Read more: Bata India Hits 2,000 Stores, Sets 3,000-Outlet Target With Focus on Tier III-IV and Digital Growth
