Technology

Tech firm eases tax returns filing for SMEs, individuals

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Evans Kithinji (right), chief technology officer at Ushuru, with Agnes Wambui, portal manager. PHOTO | COURTESY

In 2016, the Kenya Revenue Authority (KRA) doubled up its efforts to ensure that all Kenyans of earning age and businesses filed their tax returns. The authority announced that, in line with the Income Tax Act, it was mandatory for individuals and businesses bearing personal identification numbers (PINs) to submit their annual self-assessment returns six months after the close of the tax year or risk hefty fines.

This directive caught the country flat-footed as a record number of Kenyans lacked a basic understanding of their tax responsibilities to the State.

Aware of the gap that existed, Ushuru, an online portal that helps individuals and businesses meet their tax obligations, was unveiled with an initial investment of Sh400,000, most of which was raised from friends and family. “Most of the capital went into ensuring that the platform had proper security to allow for encryption and whitelisting. We also spent a good portion of this investment on making the platform responsive and have a seamless user experience — understanding the complex nature of tax,” said Ushuru’s Chief Technology Officer and co-founder Evans Kithinji.

Ushuru's target market comprises individuals and small businesses which do not have the financial capacity to engage services of established tax companies, said Mr Kithinji. “Ushuru offers varied tax-related consultancy, from mundane tasks such as changing passwords to highly complex cross-border tax advisory. This breadth of expertise allows clients across all spectrum to benefit from the great experience of our team in their individual tax compliance paths,” said Mr Kithinji. “Being an entirely online brand and with collaborative experts handling clients, Ushuru is able to offer tax assistance to Kenyans in the diaspora and expatriates working and living in Kenya.”

Among the services offered by the firm include consultancy, training for small and medium businesses, iTax services, and personal and business tax filings. The cost of services on the platform range from Sh500 to Sh50,000.

Mr Kithinji said consultancy sessions, dubbed TaxInABox, are the most popular service. The 45-minute consultancy sessions are carried out by a tax advisor, and involve analysing the tax obligations of either Kenyans living in the diaspora or expatriates living in Kenya.

“These sessions often cover all tax obligations issues including rates, possibilities of foreign tax credits, and the nature of double taxation agreements that Kenya has signed with foreign governments,” he said.

Mr Kithinji said the firm has grown at an annual rate of 25 per cent since its launch, a milestone achieved due to Ushuru’s customer centric services.

The firm’s greatest challenge is that Kenyans think it is an extension of KRA and fail to understand why it charges for its services, he said. There are also instances where customers demand for a face-to-face interaction when seeking services like tax filings, services that do not require a meeting.

READ: KRA rules out extension of tax filing deadline

The portal also works with a team of lawyers, accountants and tax experts who serve clients.

“Being a new service also, and with Kenyans not accustomed to our business model, many clients insist on face-to-face meetings which are not always ideal, unless an email or direct message on twitter would not work. But we are aware face-to-face meetings are not entirely avoidable, particularly for complex tax issues,” he said.

The firm plans to automate systems to ease taxpayers’ burden by allowing them to file taxes in tandem with employers' returns.

“This will ease the annual burden of compliance for a majority of Kenyans. We would like to introduce more flexible tax advisory and training services so as to reach a wider audience, leveraging on the connected nature of the online world and the ubiquitous prevalence of smartphones even in rural areas,” he said.

For future plans, the firm plans to partner with personal finance firms to offer all-rounded advisory services.