Befiler, a Karachi-based FinTech providing tax and business advisory services, has raised $1.5 million in seed funding from Cistech Capital and Lakson Venture Capital.
Make me care: There are very few taxpayers in Pakistan – 2.5 million, according to the last count.
The informal sector, where cash is king, employs a large percentage of the country’s population. Difficult to track and increase tax compliance.
On the other hand, the formal sector with documented income faces systemic corruption and taxation without representation, creating a trust deficit leading to non-compliance.
To make matters worse, taxpayers trying to file their taxes on the Federal Board of Revenue’s website experience problems, further creating unnecessary friction.
Due to this, tax filing is usually outsourced to lawyers – increasing the cost of compliance.
Befiler believes it can provide a more streamlined experience for tax filers, increase compliance and make life, to some extent, less taxing for taxpayers.
Tell me more: Befiler provides individual and business NTN registration and tax filing, sales tax registration and filing, and incorporation services in Pakistan and the U.S.
In the last two years, it claims to have experienced significant growth. It has 20,000 active taxpayers using its platform, according to Profit.
You should know: Befiler was founded in 2018 by Akbar Tejani and Mudassir Jokhio.
Zoom out: The digitization of Pakistan’s legacy systems is a top priority for many startups. And Befiler finds itself in a market where digitization can help transform and formalize a huge sector of the economy and increase the tax base.
It plans to use the fresh funding to further expand its products and services.