This bootstrapped tax filing platform is making accounting easier for SMEs and startups
Every early-stage entrepreneur or SME owner has one vital worry: filing of taxes and accounting. It’s an important task, and also one of the most tedious ones. It was something 45-year-old Suneel Dasari saw often in his 23 years of experience at Oracle.
“When I decided to return to India from the US, I made up my mind that my new venture should be one that solves a problem that touches most Indians. I chose taxation to build solutions at a time when most Indians were not aware of tax issues and market adoption was low, and most Indians are not aware of the tax subject during that time,” says Suneel.
He adds that today only 1.4 percent people pay taxes and 4.8 percent file taxes in India as compared to the OECD nations’ average of around 47 percent tax filers.
In 2016, Suneel bootstrapped and founded EZTax, and the portal was launched in 2017. The first SaaS product was an IT filing self-service platform that helped taxpayers file their taxes online. In October same year, the team launched EZTax Books to help SMEs to maintain their books, including invoicing, GST returns, and accounting.
Suneel says his key value proposition is that it makes tax and accounting easier. For the self-service and assisted service tax filing service, you need to register on the platform, upload Form 16, or enter the information, and e-file in under seven minutes. The consumer can also request an Expert Assisted Tax Filing Service by uploading relevant documents and paying a service fee.
For the self-service GST accounting platform, the consumer needs to register based on the business country, set up, start issuing invoices, and follow accounting. They also can prepare TDS every quarter or when needed.
“Register, and upload the documents, and make the payment. Once done, the service will be taken up by our team and the request executed,” Suneel says.
However, the task wasn’t easy, especially when the team started in 2016. Most tax filing software in India was then geared towards tax consultants.
Suneel explains that designing a tax software for a taxpayer, one that would make filing and paying taxes easy even for a novice, was challenging as it required a bit of unlearning for SMEs.
“Also, coping with the constant changes from both IT and GST Departments, and making the end-user aware of such changes has been an issue throughout our journey. Capturing the B2B and B2C through D2C (Direct to Consumer) model is tough, and we broke this by gaining confidence from B2C market before hitting B2B for our EZTax.in Books SaaS Solution,” Suneel explains.
Competition and the differentiator
Today, tax filing platforms are fast growing. Last year, tax filing and investment startup ClearTax had raised $50 million as a part of its Series B round of financing from Hong Kong-based Composite Capital. ClearTax was the first India-focused company to be funded by Y Combinator. Its other investors include Peter Thiel and Sean Parker-backed Founder’s Fund and Sequoia Capital.
Apart from that, there also is Kolkata-based TaxMantra and several other startups.
However, Suneel says most tax compliance portals were either covering income tax or GST or accounting.
“The clientele would have a great difficulty in switching between different providers. From get-go, part of EZTax.in strategy is to be a long-term player, and build assets that provide services through software, and expert services covering income tax, GST, accounting, registrations etc. Our differentiation from the competition is to have ‘innovative IT solutions, and affordable expert services,” Suneel says.
The team claims to have over 1,10,200 B2C consumers and over 5,000 GST consumers, including Anuradha Timer (International), Dhatri (Super Market), JSK Medely (Manufacturing) etc. Their client list includes companies, firms, and businesses that have Rs 20 crore in revenue.
The revenue model
“Our expert services provide margins of around 35 percent. While the software side is free to minimal subscription pricing, this is expected to change as we move into the next year. Our services are broadly classified in the way we deliver,” Suneel says. For GST accounting, the team charges Rs 5,000 per year per subscription model.
For the expert services for ITR, prices start from Rs 499; GST compliance is Rs 349 to Rs 96,000 per year. Virtual accounting services start from Rs 3,000 per month and go up to Rs 40,000 per month.
Speaking of future plans, Suneel says, “Our goal is to become a dominant player in taxation, and to be in the top two in next three years, with a million filings per year. We are soon launching tax kiosks in select cities. We are also looking to add AI modules and newer products.”
(Edited by Teja Lele Desai)