In Conversation with South Africa's TaxTim

Marc Sevitz and Evan Robinson, founders of TaxTim

Marc Sevitz and Evan Robinson, founders of TaxTim

I'm personally interested in startups that aim to make the regulatory and tax environments easier to navigate for members of the general public. So I was interested to hear about Cape Town-based TaxTim's latest investment from Exponential, the innovation unit of financial services firm MMI, and contacted them to ask if they'd like to answer a few questions for the Other Valleys. Founder Evan Robinson graciously agreed - here's what we spoke about:

First, congratulations on your investment from Exponential! Could you give us a short history of TaxTim - why you created it, and a couple of key milestones that have helped to get you to this point? 

TaxTim was started in 2011 when I had a problem doing my own tax return. I was a freelancer at the time and the process was just too stressful, complicated and confusing (also boring!). I visited my friend Marc (now director and CFO) who simply asked me the right questions in plain language, and that evening I was able to do my own tax return quite simply. I had the idea to take everything Marc knew about tax and put it into a machine, then put the machine online, so that everyone could have access to affordable, expert tax assistance when they needed it. We entered this idea into the Google Umbono incubator and won our initial funding. Since 2011 we have integrated with our local revenue service to allow easy tax return submissions and assessments via our system, and also launched into Namibia with PwC as our partner.

What has the biggest challenge been in terms of acquiring users?

Seasonality is a challenge - for a tax business, people are only interested in your service for part of the year, so keeping the business running and optimising the product continuously requires a creative approach. Another challenge is trying to tell people there is now a new option to solving their tax problems - most people have a friend or relative that they happily hand over their responsibility to, not knowing that that option has its drawbacks.

Have you been part of any accelerators - what has your experience been?

Yes, in 2011 we were part of the Google Umbono incubator which really helped us establish ourselves in the early days. In 2015 we were part of the Grindstone accelerator from Knife Capital. Their approach was to make us focus on the end goal - what do we want to look like in the future. This approach had great merit in forcing us to make important changes now.

How did your relationship with PwC come about for the expansion into Namibia, and are you looking at working with them in other markets?

We basically sent introductory emails to prominent people at the Big Four and PwC was the only company innovative enough to take a chance on doing tax in a totally new way. We would like to work with them in other countries too. On a side note, we work with the other audit firms in SA providing educational training too.

What are the regulatory challenges in working in a different country, if any?

Luckily our partner PwC has a strong relationship with Internal Revenue so they were able to create a custom tax form just for our use. Our system is built to be completely customisable for countries with different tax rules, so our deployment there only required a few small changes.

There are a few startups now that are getting into developing government-related services for the public in other markets, such as India's Cleartax. Have you looked any of those models while developing TaxTim? Are there things you'd like to replicate in South Africa from other markets?

I think the opportunity is wide open for people to improve on government-provided services, they are usually not well built and aren't designed from a customer perspective.

What are your future plans for TaxTim, as you look to grow? Any upcoming features you'd like to mention, or markets that you are looking to grow in?

Now that we have proven our system can handle high volumes of customers, we look to onboard new distribution partners that add value to the tax return journey. Some of those partners are in high-growth African countries where we see fertile soil.

Thanks, Evan and Marc!

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