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Digitax: Simplifying eTIMS Compliance · The Mwango Capital Podcast

0:00
SPEAKER_01: Good evening, ladies and gentlemen.
0:02
SPEAKER_01: It's another Mungo Spaces session.
0:05
SPEAKER_01: Today, we are talking about taxes.
0:08
We'll be looking at how to simplify eTeams for you as a
0:12
taxpayer and the challenges
0:13
you've been facing and how our expert from DigiTac can help you
0:19
be compliant.
0:21
SPEAKER_01: My name is Joe Maniki.
0:22
SPEAKER_01: I am not new on Mungo Spaces.
0:25
SPEAKER_01: I'm a regular member, especially every time we are talking about taxes.
0:30
SPEAKER_01: I am a tax practitioner with over 10 years of experience.
0:35
And our guest this evening is an IT expert who will be breaking
0:39
down aspects of eTeams.
0:42
and simplifying them for taxpayers who are still trying to
0:46
onboard eTeams and share
0:49
SPEAKER_01: with you solutions for any challenges that you may have faced so far.
0:54
SPEAKER_01: Our expert is Cain Wanjiao and I will allow Cain to introduce himself.
1:01
You will introduce yourself Cain and give us a background of
1:05
your experience,
1:06
SPEAKER_01: what you've done before and when.
1:09
SPEAKER_01: You started Digitax and what you're currently doing at Digitax.
1:12
SPEAKER_00: Thank you very much, Joe.
1:14
SPEAKER_00: And good evening to all our listeners.
1:16
Glad to be on OneGo Spaces and looking forward to the
1:20
discussion that we're going to have today.
1:22
SPEAKER_00: I have a background in technology.
1:25
SPEAKER_00: My career of about 15 years has focused mostly on technology.
1:30
And that was actually the point at which I got interested in
1:33
E-Teams as a way to
1:35
streamline the whole process around tax filing from a
1:38
technology standpoint.
1:40
SPEAKER_00: But even going way back,
1:42
it's something that had always been back on my mind because
1:44
when I started out in
1:45
SPEAKER_00: business back in 2011,
1:46
SPEAKER_00: when a client asked me for a tax invoice,
1:51
SPEAKER_00: I remember having to go and buy an ETR, get trained on how it works.
1:57
SPEAKER_00: And for those of you who remember,
1:59
we had to be given almost like a cheat code with how you
2:02
specifically engage with
2:03
SPEAKER_00: the device and how you generate an invoice.
2:05
SPEAKER_00: And if you made a mistake, unwinding it was almost next to impossible.
2:09
SPEAKER_00: When I first interacted with an ETR or an electronic tax register,
2:13
SPEAKER_00: at the back of my mind,
2:15
I felt there's an opportunity to improve the user experience
2:18
and have something
2:19
that the everyday business person can engage with and interact
2:23
with easily.
2:24
SPEAKER_00: So when ITIMS came along as a policy at the beginning of 2023,
2:28
given this is something that I had experienced and had been
2:31
thinking about as the
2:32
SPEAKER_00: years went about,
2:34
I felt it was a good time for me to think about starting
2:37
Digitax to essentially
2:38
SPEAKER_00: simplify tax compliance.
2:41
SPEAKER_00: And that's what we do.
2:42
We're basically a software platform that simplifies tax
2:45
compliance end to end.
2:47
We make it easier and faster for businesses to generate their
2:51
tax invoices as the case may be.
2:53
SPEAKER_00: And our slogan is actually less taxing.
2:56
SPEAKER_00: Some people interpret it as less taxes,
2:58
SPEAKER_00: but it's actually basically making it a less burden,
3:01
SPEAKER_00: some experience.
3:02
SPEAKER_00: That's been my Digitax journey today in a nutshell.
3:06
SPEAKER_01: Thank you, Ken, for that introduction.
3:08
SPEAKER_01: I know that you've worked in the tech space in different organizations,
3:13
SPEAKER_01: but we will pack that for tonight.
3:15
We will specifically dwell on the DigiTax and how it's helping
3:20
taxpayers simplify
3:21
SPEAKER_01: their onboarding and compliance with eTeams.
3:25
SPEAKER_01: And maybe just to simplify it for our listeners,
3:29
I will probably just give a legal framework on E-teams and
3:32
E-teams for any layman
3:34
SPEAKER_01: joining us in the electronic tax invoice management system.
3:39
SPEAKER_01: We should not assume that everyone understands these terms.
3:42
So we try to make it as simple for even people who are not in
3:47
accounting tech to be
3:48
SPEAKER_01: able to understand.
3:50
SPEAKER_01: And basically,
3:51
SPEAKER_01: Kenya introduced items through different legal avenues,
3:56
SPEAKER_01: and one was in the VAT Act,
3:59
SPEAKER_01: Section 34.
4:01
There has been always a provision that a taxpayer should
4:04
maintain an electronic tax
4:06
system that can be verified by the Revenue Authority to be able
4:11
to determine their
4:12
SPEAKER_01: invoicing and the revenue that they haven't.
4:16
SPEAKER_01: One,
4:16
SPEAKER_01: two,
4:17
SPEAKER_01: there was the VAT electronic tax invoice regulations of 2020,
4:24
SPEAKER_01: which introduced the need to invoice through an electronic system.
4:30
And that birthed what started initially as a tax invoice
4:34
management system,
4:36
SPEAKER_01: Teams,
4:36
SPEAKER_01: which came with the Teams devices.
4:38
Then Finance Act 2023 also introduced a requirement that for
4:44
income tax purposes,
4:46
Only expenses that have been supported by electronic tax
4:50
invoices would be allowed
4:53
SPEAKER_01: against your revenue before arriving at the taxable amount.
4:57
SPEAKER_01: That actually went full cycle,
5:00
meaning that a taxpayer needed to have electronic tax invoicing
5:05
management system
5:06
SPEAKER_01: for VAT purposes and two,
5:08
SPEAKER_01: for income tax purposes as well from January 2024.
5:13
So that is a brief background on the legal framework of how
5:18
eating came into being.
5:20
We will request Cain maybe just to help us understand what
5:24
Digitax is doing in the
5:26
SPEAKER_01: implementation of eTeams.
5:29
You can help us understand how some of these tech companies get
5:34
to be approved by KRA.
5:36
You can start from there and then you will walk us through the
5:40
integration process into eTeams.
5:42
So you can start by telling us about the approval system and
5:46
then you walk us
5:47
SPEAKER_01: through the integration process.
5:50
In terms of Digitax and its role in E-Teams and electronic tax
5:55
invoicing in
5:56
SPEAKER_00: general,
5:56
we are licensed by the Kenya Revenue Authority to provide
6:01
E-Teams solutions.
6:03
SPEAKER_00: And this comes in various forms.
6:05
SPEAKER_00: In our case as Digitax,
6:07
we offer a platform that allows you to choose which solution
6:11
makes most sense for
6:12
SPEAKER_00: you as a business.
6:12
SPEAKER_00: We have an Android application.
6:14
SPEAKER_00: We have a point of sale solution.
6:16
SPEAKER_00: We have our online portal.
6:18
You can also integrate your system to eTeams through the
6:21
DigiTax platform.
6:22
SPEAKER_00: So you provide an integration platform.
6:24
SPEAKER_00: The licensing process is,
6:26
it's pretty straightforward in the sense that Cary have an open
6:29
licensing regime
6:30
SPEAKER_00: around eTeams and they do provide their own solutions as well.
6:34
There are a lot of taxpayers today who use a citizen,
6:37
for example,
6:38
for eTeams.
6:39
You also have quite a number of registered and licensed
6:42
entities that Cary provide a list for.
6:44
The process is typically you'd express interest and get access
6:49
to the technical
6:50
SPEAKER_00: documentation for integration.
6:52
SPEAKER_00: You'd then build your solution and showcase it to the KRA team.
6:56
What is important is to show that one,
6:59
you've understood the technical requirements.
7:01
You've also catered for each and every situation and scenario
7:04
that KRA envisions
7:06
SPEAKER_00: E-teams should be used for.
7:07
And then,
7:08
of course,
7:08
you have to pass the legal tests in addition to the technical
7:12
tests.
7:12
SPEAKER_00: Are you a Kenyan entity?
7:13
SPEAKER_00: Are you duly constituted?
7:15
The requirements have changed slightly from the time we got
7:19
licensed back in 2023.
7:21
But the general state of things is that you have to show that
7:24
you're a business
7:24
SPEAKER_00: that can offer and support items.
7:27
SPEAKER_00: And then once the carrier is satisfied, they license you.
7:29
And once they license you,
7:30
then you are free to go and market your solution.
7:33
SPEAKER_00: So that's the space we play in Digitax.
7:36
SPEAKER_00: And so far,
7:37
we've been in the market for about 16 months because we were
7:41
licensed in November
7:42
SPEAKER_00: 2023.
7:43
So what you tend to find is companies that wish to offer a
7:48
software solution do go
7:50
SPEAKER_00: and get licensed directly by KRA.
7:53
SPEAKER_00: However,
7:53
for businesses that don't have e-invoicing or e-teams as their
7:57
core business,
7:58
they'll then want to look for a licensed integrator to
8:01
basically provide them the
8:03
SPEAKER_00: solution.
8:04
SPEAKER_00: So that's the space Digitax plays in.
8:06
We basically help companies now that would want to do this
8:09
through a third party,
8:10
SPEAKER_00: get properly set up and configured on the e-teams platform.
8:14
My follow-up question is KRA has presented eTeams to be a very
8:18
simplified system
8:20
that taxpayers can use and of course eliminate the additional
8:25
costs that initially
8:26
SPEAKER_01: came with the Teams devices.
8:29
It appears that it's not as straightforward to taxpayers who do
8:34
not have technical expertise.
8:36
SPEAKER_01: What would you say about presenting it as a very simplified solution,
8:42
SPEAKER_01: yet it has to still have hidden challenges for many taxpayers to onboard?
8:47
SPEAKER_00: In terms of the simplicity or straightforwardness of the solution,
8:50
SPEAKER_00: from a process standpoint,
8:52
the laws you referred to and the whole process around DTIMS is
8:57
designed to work
8:58
SPEAKER_00: smoothly.
8:59
SPEAKER_00: We know when all the pieces are working together.
9:01
SPEAKER_00: So let me give you some examples.
9:03
SPEAKER_00: Previously as a business,
9:05
SPEAKER_00: at the end of every month,
9:06
SPEAKER_00: when you're doing your periodic taxes,
9:09
SPEAKER_00: you need to go and fill this in manually,
9:10
SPEAKER_00: or you need to basically take time to prepare.
9:13
SPEAKER_00: and upload those statements and then file and pay your taxes.
9:17
One of the goals of eTeams is to automate that process whereby
9:22
based on the
9:22
SPEAKER_00: receipts you're generating through Teams,
9:24
SPEAKER_00: which is a predecessor to eTeams and eTeams itself,
9:27
SPEAKER_00: this information is automatically populated.
9:29
And then once that is done at the end of every month or the
9:33
beginning of the next
9:33
SPEAKER_00: month,
9:34
you can then go and see what your tax amount is for various
9:37
taxes like VAT,
9:39
SPEAKER_00: for example.
9:40
The other idea here was because the law now mandates that for
9:44
you to claim a tax
9:45
SPEAKER_00: deduction,
9:46
SPEAKER_00: there must be a tax invoice.
9:47
The system was designed to give visibility and verification in
9:51
terms of whether or
9:52
SPEAKER_00: not a tax invoice has been generated.
9:54
SPEAKER_00: When you ask for a new team's invoice,
9:56
SPEAKER_00: what people are really looking for is the QR code,
9:59
SPEAKER_00: which when they scan,
10:00
they should be able to see that the information has reflected
10:03
on KRA side.
10:04
SPEAKER_00: And then that gives you confidence that,
10:06
SPEAKER_00: you know,
10:06
the expense you wish to claim at least has been registered and
10:09
you should be good
10:10
SPEAKER_00: for it come tax payment time.
10:13
SPEAKER_00: Now, as with any new system, they've been teeming technical challenges.
10:17
A Z Teams has rolled out maybe due to the number of users or an
10:20
issue here or there.
10:22
SPEAKER_00: Of course, we can't speak on behalf of Kiara.
10:24
SPEAKER_00: It doesn't work as smoothly as expected.
10:27
SPEAKER_00: I think even on X,
10:28
SPEAKER_00: anytime E-Teams or a citizen has an issue,
10:31
you'd see a lot of people raising questions or queries or
10:35
complaints saying that my
10:36
SPEAKER_00: E-Teams is not working,
10:37
SPEAKER_00: I'm having a challenge.
10:39
And compounding that is a fact that also due to the laws and
10:43
the policies and the
10:44
SPEAKER_00: regulations,
10:45
SPEAKER_00: E-Teams has become a crucial document in the payment journey.
10:48
You have many businesses saying,
10:50
I'm happy to pay you,
10:51
but Tony,
10:51
when I see an E-Teams invoice.
10:53
SPEAKER_00: And if that delays for any reason,
10:54
you can imagine the frustration people and businesses go
10:57
through and trying to
10:59
SPEAKER_00: follow up on their payment.
11:00
SPEAKER_00: So those challenges are there.
11:02
SPEAKER_00: Carey themselves have acknowledged.
11:04
SPEAKER_00: And I would say it's continuous working in progress.
11:08
SPEAKER_00: Now,
11:09
SPEAKER_00: what then happens is one has to ask themselves,
11:11
SPEAKER_00: okay,
11:11
SPEAKER_00: how do I manage or mitigate these challenges?
11:14
Or how do I make sure that the requirement for teams does not
11:17
become a drain on my
11:18
time or my processes or my workflows or even the people hours
11:22
we spend on such
11:24
SPEAKER_00: activities?
11:25
SPEAKER_00: So those are some of the things we've tried to address at Digitax.
11:28
SPEAKER_00: Systems are never perfect.
11:30
SPEAKER_00: They'll always have issues here and there.
11:33
And what we've tried to do as Digitax is basically try manage
11:36
or alleviate those
11:37
SPEAKER_00: challenges as much as possible.
11:39
SPEAKER_00: I'll give you a few examples.
11:41
SPEAKER_00: So the way we've designed our system,
11:43
SPEAKER_00: Even if eTeams is offline or unavailable for any reason,
11:46
SPEAKER_00: SDGTAC is still able to receive and acknowledge the transaction.
11:50
And then what happens on our end is we will retry that
11:54
transaction when eTeams is back online.
11:56
SPEAKER_00: We'll first acknowledge.
11:57
SPEAKER_00: We may not be able to contact eTeams at that moment in time,
12:00
but we will contact eTeams when it's backer and then be able to
12:04
show you the status
12:05
SPEAKER_00: of that transaction.
12:07
SPEAKER_00: So that's one of the things that we do.
12:09
SPEAKER_00: The other one is we'll always give you a digital receipt.
12:13
SPEAKER_00: In case,
12:13
SPEAKER_00: for example,
12:14
SPEAKER_00: you want the QR code or the validation,
12:16
SPEAKER_00: in case it's not available at that point in time,
12:19
we'll give you a digital receipt that enables you to track the
12:23
status of the ETM's
12:24
SPEAKER_00: transactions.
12:25
So now this is where business has to make a decision because at
12:28
the end of the day,
12:29
SPEAKER_00: you have free option and you may have low volume of transactions,
12:32
SPEAKER_00: but you may also have time sensitive or high volume transaction.
12:37
SPEAKER_00: And you want a solution that you feel caters to those scenarios.
12:41
SPEAKER_00: For us as licensed players, now that is how we would position ourselves.
12:44
How do we basically give you value added services as far as
12:48
E-Teams is concerned?
12:50
SPEAKER_00: The other thing,
12:50
SPEAKER_00: of course,
12:51
is if you have a specific workflow or you have an ERP or a
12:55
point of sale or a
12:57
SPEAKER_00: system that needs its own NIC specific integration,
13:00
you'd then choose to work with someone who has the capability
13:03
and the ability to
13:04
SPEAKER_00: integrate your system to E-team.
13:05
SPEAKER_00: So there's space for different solutions depending on your use case.
13:09
SPEAKER_00: There are some solutions that are specific to certain industries.
13:12
So it's really about how you feel you want to manage some of
13:15
these eventualities.
13:16
SPEAKER_00: Are you looking at cost,
13:17
SPEAKER_00: performance,
13:18
SPEAKER_00: efficiency,
13:19
SPEAKER_00: trade-off,
13:19
and how do you cater to those and which solution offers you the
13:22
best option based
13:23
SPEAKER_00: on what you need?
13:25
SPEAKER_00: So that's the role we play as integrators in the eTeams ecosystem.
13:28
SPEAKER_01: Maybe you can help us understand if I need support from Digitax,
13:33
SPEAKER_01: I was a taxpayer and I'm a layman,
13:35
be able to determine whether I need to go through the ERP
13:40
integration route,
13:41
SPEAKER_01: or I need to go through the online available system,
13:45
SPEAKER_01: or whether the mobile app will work for me.
13:48
So are you able to evaluate the taxpayers maybe by volume base
13:53
or whatever
13:53
SPEAKER_01: parameters and determine the best solution for them?
13:57
The general process we normally recommend is first understand
14:00
what your tax obligations are.
14:02
So DigiTax is not a tax advisor and we're not licensed to offer
14:07
that service.
14:08
SPEAKER_00: However,
14:09
SPEAKER_00: once you've understood what your tax obligations are,
14:11
SPEAKER_00: we would then assess which solution works best for you.
14:15
So as you're aware,
14:16
one of the goals of your teams was to expand the tax base.
14:19
SPEAKER_00: So previously with ETR and Teams,
14:22
it was mainly geared at large taxpayers with a certain
14:25
threshold or volume of
14:26
SPEAKER_00: turnover.
14:27
SPEAKER_00: But E-Teams has materially expanded that to also capture individuals.
14:32
SPEAKER_00: So if you're a consultant or if you're a solo entrepreneur,
14:37
SPEAKER_00: E-Teams is now one of the requirements.
14:39
And that's why the three options on USSD and so on and so forth
14:43
came along.
14:44
SPEAKER_00: Now, the best way to assess this is to ask yourself three questions.
14:48
SPEAKER_00: One is, what's the volume of transactions I process?
14:51
SPEAKER_00: And what's the best tool for that?
14:53
As I mentioned earlier,
14:54
we offer mobile app,
14:56
offer the online web dashboard.
14:58
SPEAKER_00: We also offer integration.
14:59
So you'd assess your unique business environment from a volume
15:03
standpoint.
15:04
You'd also need to determine whether or not you want E-Teams
15:07
integrated with a system you use.
15:10
So typically what you find is consultants or doctors or
15:13
individual business people,
15:15
SPEAKER_00: they would probably not need an integration.
15:17
So they'll choose maybe an app in case they want to print a
15:20
physical receipt,
15:21
or they'd go online to the web portal if they can email or
15:25
download the Invoice as
15:27
SPEAKER_00: a version they prefer.
15:29
Then the second thing that's important to consider is how many
15:33
people within your
15:34
SPEAKER_00: business or ecosystem need access to this information.
15:38
SPEAKER_00: Typically,
15:38
SPEAKER_00: most solo traders would,
15:40
SPEAKER_00: for example,
15:40
SPEAKER_00: want to share this information with their auditor,
15:42
SPEAKER_00: with their accountant,
15:44
SPEAKER_00: or even the salesperson to generate the tax invoices.
15:47
SPEAKER_00: And that would be,
15:48
SPEAKER_00: for example,
15:49
one reason to consider Digitax because our platform is designed
15:52
to be a multi-user
15:53
SPEAKER_00: platform.
15:54
SPEAKER_00: So several users can have access to the same tax account.
15:57
If you wanted to use eTeams,
15:59
the main method of logging in is through your PIN and a
16:02
password.
16:03
So if more than one person needs to access,
16:05
it means you have to share those credentials.
16:08
SPEAKER_00: So if you're not doing this strictly by yourself,
16:11
then you'd want to consider an option that allows many users to
16:14
access the same
16:15
SPEAKER_00: business information.
16:16
SPEAKER_00: And then thirdly,
16:17
it's what level of audit or governance or compliance do you
16:21
need within your
16:22
SPEAKER_00: entity?
16:23
There are some businesses that mandate that there has to be an
16:26
independent way to
16:27
SPEAKER_00: audit what has gone to ETIMS.
16:30
SPEAKER_00: So in that case,
16:31
you'd need to have an intermediate solution that basically is
16:34
able to receive and
16:35
channel requests to ETIMS so that you can always follow up in
16:38
case any audit or
16:40
SPEAKER_00: governance or follow up is required.
16:42
So those tend to be the factors that inform which e-team
16:46
solution one would need.
16:47
SPEAKER_00: But just to recap,
16:48
the first step is to understand either through talking to Kere
16:52
or through a tax
16:53
SPEAKER_00: professional,
16:54
SPEAKER_00: what am I?
16:55
SPEAKER_00: Tax obligations.
16:56
SPEAKER_00: You could be liable only for income tax, for example.
16:59
SPEAKER_00: You could be liable for income tax and value-added tax, for example.
17:04
SPEAKER_00: As an individual, you could be liable for withholding tax.
17:07
SPEAKER_00: So that's usually the first step.
17:09
SPEAKER_00: Then determine the volume,
17:11
SPEAKER_00: the number of users,
17:12
and the unique regulations and requirements around your
17:14
business in terms of
17:16
SPEAKER_00: generating and transmitting tax invoices.
17:18
And then from there,
17:19
you can then determine which solution works best for you.
17:22
SPEAKER_01: We can first explore the integration to ERPs.
17:27
SPEAKER_01: And by so doing,
17:28
you can explain to us the different types of ERPs you've
17:31
successfully managed to
17:33
SPEAKER_01: integrate taxpayers on eTeams.
17:36
SPEAKER_01: And the second question would be,
17:39
SPEAKER_01: when you're doing this integration,
17:41
does it then mean that Digitax have access to a taxpayer's ERP
17:47
and classified
17:48
SPEAKER_01: information?
17:49
How does a taxpayer ensure that confidentiality of such
17:53
information will be
17:55
maintained by Digitax and that their information will not be
17:59
misused by whichever
18:00
SPEAKER_01: way?
18:01
So we can start with the ERPs and then the confidentiality of
18:05
information.
18:06
I think she raised some important points,
18:08
especially on the second question.
18:10
SPEAKER_00: So in terms of ERPs or systems we've integrated,
18:13
SPEAKER_00: we've actually done,
18:14
SPEAKER_00: let's say over 30 different systems.
18:17
SPEAKER_00: And the reason for that is the way we've designed our integration,
18:21
SPEAKER_00: it's neutral in the sense that any system can work with the integration.
18:25
SPEAKER_00: So we offer APIs or what's known as Application Programming Interface.
18:30
It's a standardized way for two systems to talk to each other
18:33
and they usually
18:34
standardized and accepted protocols of how system A would talk
18:38
to system B through
18:40
SPEAKER_00: an API.
18:41
SPEAKER_00: So that's what we built.
18:43
SPEAKER_00: Now, with regards to our offering,
18:46
It's available in 19 different software languages and which
18:50
covers the vast majority.
18:52
You find people use a certain version of software to run their
18:56
business or the ERP
18:57
SPEAKER_00: is built with a certain version of software.
18:59
SPEAKER_00: We offer that as an option in terms of integration.
19:03
SPEAKER_00: In addition to that, we offer platform specific integrations, so
19:08
SPEAKER_00: For example,
19:09
SPEAKER_00: if you use QuickBooks,
19:10
SPEAKER_00: whether online or desktop,
19:12
SPEAKER_00: we have a module that integrates specifically with QuickBooks.
19:16
SPEAKER_00: We've done the same for other common ERPs like Odoo, Sage as well.
19:20
SPEAKER_00: So we've offered some of the main solutions,
19:22
SPEAKER_00: but underlying all that is our integration platform and approach,
19:27
SPEAKER_00: where we offer this in as many different software languages as possible.
19:31
So the way we've looked at it is we have to be agnostic or
19:34
neutral in terms of the
19:35
SPEAKER_00: solution you use to generate your invoices.
19:37
And we want to give you as much offering as possible to be able
19:40
to integrate and be
19:42
SPEAKER_00: E-teams compliant.
19:44
SPEAKER_00: And we continue to add more,
19:45
SPEAKER_00: even in markets outside Kenya,
19:48
SPEAKER_00: where we do offer a similar solution.
19:51
SPEAKER_00: We've offered options that are relevant for that market.
19:54
SPEAKER_00: Now,
19:54
SPEAKER_00: regarding your second question around privacy and confidentiality,
19:58
SPEAKER_00: that's actually an important point.
19:59
SPEAKER_00: And we've seen it's a primary criteria by which businesses evaluate which
20:03
SPEAKER_00: integration partner to work with.
20:05
SPEAKER_00: Now, what we did as Digitax is we took a proactive approach to this.
20:09
SPEAKER_00: So even before we got licensed by KARE back in 2023,
20:14
SPEAKER_00: We actually conformed and complied with the Data Protection Act.
20:18
SPEAKER_00: And normally the processes you'd apply to what is known as ODPC,
20:23
SPEAKER_00: Office of the Data Protection Commissioner,
20:26
SPEAKER_00: and they would assess what you're offering,
20:28
SPEAKER_00: the steps and processes you have,
20:30
SPEAKER_00: your privacy policy,
20:32
SPEAKER_00: your terms and conditions,
20:33
SPEAKER_00: and look at a whole host of things.
20:35
SPEAKER_00: I mean,
20:35
SPEAKER_00: if they're satisfied and comfortable with how you've approached this,
20:40
SPEAKER_00: you're then issued with two certificates.
20:42
SPEAKER_00: You should do the data processor license and a data controller license.
20:47
They are distinct in the sense that a data controller means
20:50
you're managing and
20:52
SPEAKER_00: have visibility about certain sensitive information.
20:55
And data processor means just receive and pass through the
20:58
information onto another
20:59
SPEAKER_00: party without actually processing or handling it.
21:02
The approach we've taken as DigiTax is because we handle
21:05
sensitive information,
21:07
we've taken a proactive approach in terms of getting licensed
21:09
and ensuring we are
21:10
conforming with all the regulations as per the Data Protection
21:14
Act of 2019.
21:16
SPEAKER_00: But then even above and beyond that,
21:18
it's also in our privacy policy and terms and conditions that
21:21
we also indicate how
21:24
SPEAKER_00: we handle your data.
21:25
SPEAKER_00: In what circumstances we can help you manage a specific transaction.
21:29
And also the security precautions we've taken in terms of
21:34
managing your information.
21:35
Because you're an integrator would naturally have visibility on
21:39
what you're
21:39
SPEAKER_00: transmitting to the tax authority.
21:41
SPEAKER_00: Similar to an ERP would hold your data or even how a bank would process
21:46
SPEAKER_00: transactions flowing through your system.
21:48
But the important thing is,
21:49
have you approached this correctly from a legal standpoint?
21:53
Have you invested in systems and processes to make sure that
21:58
you minimize or
21:59
SPEAKER_00: eliminate the chance of data loss?
22:02
SPEAKER_00: And also to ensure that from a privacy standpoint,
22:04
SPEAKER_00: you've made it clear to your customers what and how you handle
22:07
SPEAKER_00: There's also like regulatory requirements.
22:09
SPEAKER_00: So when you're licensed,
22:10
there's a certain amount of time you have to hold on to
22:14
information for audit and
22:15
SPEAKER_00: legal purposes from a KRA standpoint.
22:17
So there's also that factor to consider in case of any future
22:20
audit or follow up or
22:21
SPEAKER_00: anything that has to be cross verified in future.
22:25
So those are the factors that inform how and when we handle
22:28
customer data.
22:29
It's very important to give the taxpayers and your potential
22:34
customers that
22:35
confidence that their data will be handled with the highest
22:38
level of legal
22:40
SPEAKER_01: confidentiality.
22:41
SPEAKER_01: Now,
22:42
SPEAKER_01: Ken,
22:42
you mentioned that for the ERP integrations that you've managed
22:46
to integrate
22:47
SPEAKER_01: different available softwares.
22:49
SPEAKER_01: Maybe question on that for the different things.
22:52
The cost of integration and your admin support similar or does
22:56
it change with the
22:57
SPEAKER_01: type of software that a taxpayer uses?
23:01
SPEAKER_00: It's generally defined by the type of solution you wish to use.
23:05
SPEAKER_00: For the mobile app,
23:07
SPEAKER_00: the handle point of sale software and the dashboard,
23:10
SPEAKER_00: the price is pretty standard.
23:13
With integration,
23:14
that normally needs a discussion because we need to understand
23:16
a few things.
23:17
SPEAKER_00: Which system are integrating with?
23:19
SPEAKER_00: How much support do you need during the integration process?
23:22
SPEAKER_00: And what volume of invoices would you wish to process?
23:25
Those are the three factors we consider when giving you a quote
23:29
if you're an
23:29
SPEAKER_00: integration customer.
23:31
SPEAKER_00: However, for the dashboard and for the apps, that's pretty standard.
23:36
We also help businesses who need to clear a backlog of
23:40
historical invoices.
23:42
SPEAKER_00: With that one,
23:42
SPEAKER_00: what's happened is you may start using eTeams like say today,
23:46
but you have a backlog from January or from a previous period
23:49
that you need to put
23:50
SPEAKER_00: on eTeams as well.
23:52
SPEAKER_00: So we help you upload historical invoices onto eTeams.
23:56
And that's usually a separate service,
23:58
but unless it's an integration customer,
24:00
SPEAKER_00: Generally speaking, the fees and the costs are standardized.
24:03
SPEAKER_00: It's usually along those three pricing points.
24:06
The other thing I would want you to clarify to our listeners is
24:10
whether prior to
24:11
SPEAKER_01: onboarding E-Teams,
24:13
if a taxpayer or a client wants to go the route of integration
24:17
to their ERP,
24:18
whether there are any specifications on their server for
24:22
E-Teams able to work
24:24
SPEAKER_01: efficiently.
24:25
So we've tried to make the process as standardized as possible
24:28
and would like the
24:29
SPEAKER_00: process also to be as self-service as possible.
24:33
So for those who are typically interested in an integration,
24:35
we would offer them a few things.
24:37
SPEAKER_00: We'd offer them our documentation,
24:39
SPEAKER_00: which is public,
24:40
SPEAKER_00: so they can go online,
24:41
SPEAKER_00: look at our documentation and how to integrate.
24:44
SPEAKER_00: And if you're technical enough or you know how to go about integrations,
24:48
It's very easy to get started because all you need to do is
24:51
sign up on our dashboard.
24:53
SPEAKER_00: You'd create a test account,
24:54
SPEAKER_00: get some security keys,
24:55
SPEAKER_00: which you can use to map your account on Digitax with your system.
24:59
SPEAKER_00: And then from there, you can start testing and see how information flows.
25:02
So at that point,
25:03
the whole idea is to get you comfortable with how our
25:05
integration would work.
25:07
SPEAKER_00: Of course,
25:07
SPEAKER_00: our team is on hand to help,
25:08
SPEAKER_00: but by and large,
25:09
most businesses are able to figure this out on themselves if
25:13
they have an IT
25:13
SPEAKER_00: background or they know their way around technical integrations.
25:17
SPEAKER_00: So at that point,
25:18
SPEAKER_00: of course,
25:18
we would have an engagement and I would try to understand your
25:21
business from the
25:23
SPEAKER_00: three factors I mentioned earlier.
25:25
The solution you're using,
25:26
how much support you need,
25:28
and the volume of invoices.
25:30
SPEAKER_00: And then we would then basically now start a commercial conversation.
25:34
Once that is concluded and you're fully ready to go,
25:38
you've finished up integration on your end.
25:40
SPEAKER_00: The process of going live is actually very easy because we would,
25:44
SPEAKER_00: of course,
25:44
SPEAKER_00: need to activate you on the eTeams platform on KRA.
25:47
SPEAKER_00: But by and large,
25:48
the integration you used during the test phase is the same one
25:51
you'd use when
25:52
SPEAKER_00: you've gone live or your account is not actually sending reeling voices.
25:57
We would just change the security keys to show that you're
26:00
using an actual account
26:01
SPEAKER_00: rather than a test account.
26:03
SPEAKER_00: So that's a general process from an integration standpoint.
26:05
SPEAKER_00: We've seen customers go live in as short as a week,
26:10
SPEAKER_00: especially if you're ready,
26:11
you know what you're looking for and you're keen to get going
26:14
and you commit enough
26:15
SPEAKER_00: time and resources.
26:16
So provided what you're doing and you're ready,
26:18
it can be a very quick process.
26:20
SPEAKER_01: Maybe from a practitioner perspective,
26:23
one of the challenges I've experienced is cases where a
26:27
supplier has given you an
26:28
SPEAKER_01: invoice.
26:29
SPEAKER_01: The invoice appears to have been run on eTeams or the team's device.
26:34
SPEAKER_01: It has the unique QR code.
26:37
SPEAKER_01: But however,
26:38
SPEAKER_01: when I go to file my VAT return,
26:40
SPEAKER_01: I find a situation where the information is not available on ITAC,
26:45
which means the information that was transmitted did not go
26:49
through fully to be
26:51
SPEAKER_01: able to be visible on ITAC.
26:53
Maybe you can explain to us whether you have encountered such
26:56
problems or clients
26:57
SPEAKER_01: with such problems and how you've been able to help them resolve that.
27:02
SPEAKER_00: A missing invoice can happen for one of two reasons.
27:05
SPEAKER_00: The first one is it could be missing for a genuine technical reason.
27:09
SPEAKER_00: Maybe they can't retrieve it from the ITAC system.
27:12
SPEAKER_00: For some reason,
27:12
they can't show it or there's a genuine technical issue and no
27:15
fault of the
27:16
SPEAKER_00: supplier or the buyer.
27:18
SPEAKER_00: The second scenario,
27:19
which is a little more interesting is I offer you a service and
27:23
then I issue a new
27:24
SPEAKER_00: team's invoice.
27:25
SPEAKER_00: You pay me and then you go and create a credit note.
27:28
So a credit note has the effect of basically reversing that
27:32
transaction on the
27:33
SPEAKER_00: ledger and your supplier,
27:35
SPEAKER_00: the person offered you the service or the goods may not inform you.
27:38
SPEAKER_00: So from a carrier standpoint,
27:39
SPEAKER_00: the transaction has been reversed,
27:42
SPEAKER_00: but the taxpayer did not notify you.
27:44
SPEAKER_00: So when you go to do your returns,
27:46
SPEAKER_00: You find that the information is missing,
27:48
SPEAKER_00: but in reality,
27:49
SPEAKER_00: someone reversed it and did not inform you,
27:51
SPEAKER_00: which of course is not ideal.
27:52
You can always find out,
27:53
you can ask for the ledger,
27:55
go through the transactions.
27:56
SPEAKER_00: By the time and effort to do that,
27:58
SPEAKER_00: and by the time you figure out who it is,
28:00
SPEAKER_00: it might be too late.
28:01
Especially if it's not a regular supplier who's interested in
28:05
maintaining the
28:06
SPEAKER_00: business relationship.
28:07
SPEAKER_00: So those are some of the scenarios that could cause that.
28:10
And one of the things we've done is we have an invoice
28:13
verification feature where
28:15
SPEAKER_00: if you have an ETIMS invoice,
28:17
you can put in the details and we'll be able to tell you
28:19
whether that invoice is
28:21
SPEAKER_00: valid or genuine or not.
28:23
SPEAKER_00: Because,
28:23
SPEAKER_00: of course,
28:23
the other thing we see quite a bit of is you may reuse the
28:27
current e-teams invoice
28:28
SPEAKER_00: or especially the QR code on a new invoice.
28:31
SPEAKER_00: So most people will see the QR code,
28:33
SPEAKER_00: scan it and see the information reflect whether it's unique or not,
28:37
SPEAKER_00: whether it's been used before.
28:38
That's very hard to tell unless you have a way to track
28:40
previous invoices issued by
28:42
SPEAKER_00: that supplier or whether that QR code has been issued to you before.
28:46
So those are some of the things we do as Digitax to try and
28:48
manage and mitigate that issue.
28:50
SPEAKER_00: And of course,
28:51
it's something that someone who is trying to give you a hard
28:54
time will do or cut
28:55
SPEAKER_00: corners.
28:56
SPEAKER_00: So sometimes,
28:57
SPEAKER_00: as I said,
28:58
SPEAKER_00: it's due to technical issues,
28:59
but sometimes people try to be creative and basically burden
29:03
their tax obligations
29:04
SPEAKER_00: on you.
29:05
You mentioned that DigiTax has gone to other countries,
29:08
other markets other than Kenya.
29:11
SPEAKER_01: You can try to,
29:12
SPEAKER_01: from your experience,
29:14
explain to us whether any unique challenges you've faced with
29:18
the E-Teams solution
29:20
SPEAKER_01: in Kenya and how that compares to the experience in the other markets.
29:25
SPEAKER_00: At present, we are in Kenya and Zambia.
29:28
SPEAKER_00: Zambia went live with their version of eTeams in July 2024.
29:34
SPEAKER_00: The system is called Smart Invoice,
29:36
SPEAKER_00: but it's very similar to the underlying system that powers eTeams.
29:40
So there's a lot of similarity between Kenya and Zambia from a
29:43
technology standpoint.
29:45
Of course,
29:45
there are unique factors like the tax rate,
29:47
the tax regimes,
29:48
how that is managed.
29:49
SPEAKER_00: But by and large,
29:51
SPEAKER_00: to what you hear as eTeams for Kenya,
29:52
SPEAKER_00: the equivalent for Zambia is a Smart Invoice.
29:55
SPEAKER_00: So we joined the market last year.
29:57
SPEAKER_00: We were licensed by the Zambia Revenue Authority in August last year,
30:01
SPEAKER_00: and we've been in market since with our Digitax platform as well.
30:05
SPEAKER_00: And maybe to zoom out a bit,
30:06
what's happening across Africa is governments want better
30:09
visibility on tax
30:11
SPEAKER_00: receipts and what is due to them.
30:13
SPEAKER_00: Historically, this has been periodic and after the fact.
30:16
But with the improvement in technology and access to data and
30:20
information,
30:21
SPEAKER_00: they want this information much,
30:22
SPEAKER_00: much faster.
30:23
As we speak,
30:25
33 countries in Africa have mandatory or voluntary e-invoicing
30:29
mandates.
30:30
SPEAKER_00: We believe in the next two to three years,
30:32
vast majority of countries in Africa would have mandatory
30:36
e-invoicing mandates.
30:37
SPEAKER_00: But then for this to roll out,
30:39
SPEAKER_00: as we've seen with ETIMS,
30:40
SPEAKER_00: there are three things that are essential and important.
30:43
The first is the laws and the regulations supporting
30:46
e-invoicing in a certain
30:48
SPEAKER_00: country or jurisdiction.
30:49
SPEAKER_00: The second is the technology platform supporting electronic invoicing.
30:54
SPEAKER_00: So in every market we're in,
30:56
SPEAKER_00: for example,
30:56
SPEAKER_00: at the moment,
30:57
we have to connect to the government systems and transmit that
30:59
information.
31:01
SPEAKER_00: So the platform to transmit that information needs to exist.
31:04
And then thirdly is now the rules and regulations around how
31:08
it's governed and done
31:09
SPEAKER_00: and managed.
31:10
SPEAKER_00: This could either be through subsidiary legislation.
31:13
SPEAKER_00: It could be through policy directives or mandates from the tax authority.
31:17
SPEAKER_00: Because that then governs how it relates to the market,
31:20
SPEAKER_00: how they intend to enforce,
31:21
SPEAKER_00: how they intend to make sure it's successful as an initiative.
31:25
So those are the three ingredients that basically inform
31:29
electronic invoicing in
31:30
SPEAKER_00: any country or jurisdiction.
31:33
SPEAKER_00: So that's the state of play across the continent.
31:36
Africa,
31:37
more broadly speaking,
31:38
is the second region in the world to really push e-invoicing.
31:42
SPEAKER_00: The first was Latin America.
31:44
SPEAKER_00: They've done this with very good success.
31:46
So a lot of South American countries and Central American
31:49
countries have been doing
31:50
SPEAKER_00: e-invoicing for quite a while.
31:51
SPEAKER_00: The Middle East is picking up at the moment.
31:54
SPEAKER_00: Europe is coming on by in 2027, I believe.
31:57
And so this whole movement around e-invoicing is picking up
32:01
across the world gradually.
32:03
SPEAKER_00: I do believe with time,
32:04
SPEAKER_00: many countries will come to benchmark with Africa,
32:07
SPEAKER_00: similar to how,
32:07
SPEAKER_00: you know,
32:08
there's a lot of benchmarking done around mobile money and how
32:11
that works in
32:11
SPEAKER_00: Africa.
32:12
I believe e-invoicing is one of those areas where Africa will
32:15
be used as a
32:16
SPEAKER_00: benchmark region and of course,
32:18
case studies and others will be adopted in other parts of the
32:22
world as well.
32:23
You can maybe have a person understand for digitax other than
32:27
electronic tax
32:28
SPEAKER_01: invoicing,
32:29
whether there are other tech solutions that you are offering to
32:33
your customers and
32:35
SPEAKER_01: what those would be.
32:37
At the moment,
32:37
we are primarily focused on e-invoicing and e-invoicing
32:41
adjacent services.
32:42
SPEAKER_00: Invoice verification, as I mentioned, is a service we offer.
32:46
SPEAKER_00: We have a few products in the pipeline.
32:48
SPEAKER_00: We're not ready to announce them just yet.
32:50
However,
32:50
the whole goal is to further simplify and streamline e-teams
32:54
end-to-end.
32:55
So in the next few weeks,
32:56
we will be announcing some new products and initiatives that we
32:59
have.
33:00
SPEAKER_00: But more broadly speaking,
33:01
SPEAKER_00: for now,
33:02
we are focused on just giving businesses and individuals the
33:05
best e-invoicing
33:07
solution and making that whole process as simplified and as
33:11
fast as possible for
33:12
SPEAKER_00: our customers.
33:13
The other question is for any listener who would want a
33:18
solution from Digitax or
33:20
would want to partner with Digitax to roll out e-teams or get
33:23
any solutions around
33:26
SPEAKER_01: the challenges they are facing.
33:27
SPEAKER_01: Where can they find you or how can they reach you?
33:31
SPEAKER_00: We have our platform, www.digitax.tech.
33:35
SPEAKER_00: We have a bit of information there.
33:37
SPEAKER_00: You can request a demo.
33:39
SPEAKER_00: You can also chat with us.
33:41
SPEAKER_00: There is a chat interface there.
33:43
Our customer support team will be able to share with you that
33:45
information.
33:46
There is also various social media pages,
33:49
which are available on our homepage on digitax.tech.
33:53
SPEAKER_00: We are on X, of course.
33:54
SPEAKER_00: We are on LinkedIn.
33:56
SPEAKER_00: We are on Facebook.
33:57
SPEAKER_00: We're even on TikTok.
33:58
SPEAKER_00: We try to talk about Digitax and what we do there as well.
34:02
And we're able to actually give you feedback in case you're
34:05
deciding which option
34:06
SPEAKER_00: or solution works best for you.
34:08
SPEAKER_00: And if you sign up,
34:10
you have the ability to test and understand how our platform
34:13
works at no cost.
34:14
And then,
34:15
of course,
34:15
once you're ready to go live,
34:16
we can always have a commercial discussion.
34:18
So those are the offerings and the various ways you can access
34:21
us at this point in time.
34:23
SPEAKER_00: As we come to a close,
34:25
I'll give this platform to Kane to just give us a closing
34:28
remark and just pitch
34:30
SPEAKER_01: what extra information that you would wish to reach out to your potential
34:35
SPEAKER_01: customers.
34:36
SPEAKER_00: Thank you very much, Joe, to the Mwango Capital team.
34:40
This has been a good conversation for us to share more about
34:43
what we do as Digitax.
34:45
SPEAKER_00: And for us,
34:45
the way we see ourselves is giving businesses the easiest and
34:51
fastest and most
34:51
SPEAKER_00: simplified way to be tax compliant.
34:54
SPEAKER_00: E-Teams is evolving.
34:55
SPEAKER_00: It's very dynamic.
34:56
SPEAKER_00: The little changes and updates happening.
34:59
And so our role is just to ensure that whatever is going on
35:02
behind the scenes,
35:03
SPEAKER_00: you have a solution that just works.
35:05
SPEAKER_00: Of course, to this end, we've invested in technology heavily.
35:10
We have a team that's based here of software engineers that is
35:14
in charge of
35:15
SPEAKER_00: building and maintaining the Digitex platform.
35:17
SPEAKER_00: And beyond that,
35:18
SPEAKER_00: of course,
35:18
we know one key anchor of any business in the service industry
35:21
is customer support.
35:23
So we've also invested quite a bit in customer support and
35:25
ensuring that is working
35:27
SPEAKER_00: well for our customers.
35:28
SPEAKER_00: Once again,
35:29
thank you to Joe and the team at Wango Capital and looking
35:34
forward to the questions
35:35
SPEAKER_00: that will follow after this Asante Sana.
35:37
I think one very important question came that you feel that
35:40
clarified or maybe
35:42
elaborated is how has been your experience building Digitax and
35:46
what are some of
35:47
SPEAKER_01: the lessons that you can pass on to bad developers in this space?
35:52
SPEAKER_00: Building Digitax has been a very interesting experience.
35:55
SPEAKER_00: I consider it a combination of my passion to be a business person,
35:59
SPEAKER_00: my passion around technology as well,
36:01
SPEAKER_00: and the fact that I felt there was a real market need for a solution,
36:05
SPEAKER_00: Digitax.
36:06
One of the things is people have different feelings and views
36:10
about taxes.
36:11
SPEAKER_00: The reality is that we found them here and we will leave them here.
36:14
SPEAKER_00: However,
36:15
SPEAKER_00: in a tax compliance journey,
36:17
how do we give you the easiest and most straightforward
36:20
solution that helps you get
36:21
SPEAKER_00: on with your day,
36:22
SPEAKER_00: your life,
36:22
SPEAKER_00: and your business?
36:24
SPEAKER_00: To a large extent,
36:24
DigiTax is designed to be as simple and straightforward as
36:27
possible so that it can
36:28
SPEAKER_00: get out of your way.
36:29
SPEAKER_00: Now to achieve that from a systems and technology standpoint,
36:33
you have to invest quite a lot on the backend or on the parts
36:37
that the customer
36:38
doesn't see to be able to make that operation as well as
36:41
possible or something that
36:42
SPEAKER_00: just works.
36:43
SPEAKER_00: So we invested a lot in technology and given my background,
36:47
SPEAKER_00: For me,
36:47
it's been more around thinking through how do we make this
36:51
process as easy,
36:52
SPEAKER_00: as smooth and as straightforward as possible?
36:54
How do we hide all the complexity behind our interface and make
36:58
sure what we
36:58
SPEAKER_00: present to you is the easiest and most straightforward solution to use?
37:02
SPEAKER_00: So that's the approach we've taken.
37:04
SPEAKER_00: Of course, no solution is perfect.
37:06
SPEAKER_00: We've also learned our lessons.
37:08
SPEAKER_00: But I think to a large extent,
37:09
SPEAKER_00: customers appreciate that the value we give them is underpinned by strong
37:13
SPEAKER_00: technology,
37:14
SPEAKER_00: strong product,
37:15
SPEAKER_00: and good customer service.
37:16
SPEAKER_00: And we hope to continue that in the future.
37:18
It's been an exciting journey so far and looking forward to
37:21
what the future brings.
37:22
SPEAKER_01: Thank you, Ken.
37:23
I believe that brings us to a close on our today's Margo
37:27
Species session on the
37:28
items and simplification of the process through using the
37:33
Digitax solution.
37:35
And thank you very much,
37:36
our listeners,
37:37
for taking time to be with us to the end.
37:40
SPEAKER_01: I believe we will be bringing you more mango species sessions,
37:44
SPEAKER_01: not specifically on taxes,
37:46
SPEAKER_01: but more other emerging topics as they arise.
37:49
Be on the lookout on our homepage for more interesting
37:52
conversation around
37:54
SPEAKER_01: business,
37:55
SPEAKER_01: tech,
37:56
SPEAKER_01: tax,
37:56
SPEAKER_01: and economics.
37:57
SPEAKER_01: Thank you and have a lovely evening.