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Everyone knows taxes can be tedious, challenging, and frankly anything but enjoyable especially for taxpayers in Mexico.
Enter Taxo, revolutionizing the tax experience by making it easier to understand and manage. Taxo's platform automates individual tax processes, empowering accountants to boost their efficiency and expand their client base.
Inspiration Behind Taxo
The inception of Taxo traces back to Ecuador, where David Paredes, Co Founder of Taxo, ran a traditional accounting firm named ContApp. Observing the inefficiencies in manual tax preparation, David began developing an in-house digital platform to simplify these processes. "We identified that with the same team, we could triple the number of clients," explains Constanza Martinez, Co Founder of Taxo. This realization laid the groundwork for Taxo, highlighting a widespread problem in the accounting industry: the need for efficient, digital tax solutions.
How Taxo Works?
Detailed process at how Taxo makes tax preparation easier and more efficient:
1. Mass Download of CFDIs
TaxoBot, the platform’s automated system, can download your clients' Comprobantes Fiscales Digitales por Internet (CFDIs) directly from the Servicio de Administración Tributaria (SAT) in bulk. This means you can gather all necessary invoices in one place, easily checking and exporting them in PDF and XML formats as needed.
Additionally, Taxo allows you to extract the Compliance Opinion and Proof of Tax Situation for your clients from the SAT, streamlining the documentation process.
2. Automatic Tax Calculation
Taxo simplifies the tax calculation process. Whether you're preparing monthly or annual declarations, Taxo handles it with just a few clicks. The system automatically identifies the taxpayer’s regime and economic activity, and it takes into account the details of CFDIs, payment supplements, and withholdings. This automation ensures that calculating taxes like ISR, VAT, and DIOT is fast, easy, and accurate, saving accountants significant time and effort.
3. Notifications of Tax Obligations
Taxo enhances communication with clients by sending personalized tax obligation notifications. Users can share tax reports and invoices, trigger email alerts, and provide clients access to issue invoices, download CFDIs, their Tax Situation Certificate and Compliance Opinion directly from the Customer Portal. This keeps clients informed and involved, improving the overall experience.
4. Electronic Billing
Taxo supports electronic billing, allowing you to issue CFDIs from anywhere, at any time. You can create various types of invoices, including 4.0 invoices, credit notes, shipping letters, payroll receipts, and fee receipts, with full connectivity, ensuring that your billing process is seamless.
Challenges and Misconceptions
Starting Taxo was no easy feat. One significant mistake was assuming that tax guidelines in Ecuador would be similar to those in Mexico. "Assuming that individual consumer behaviors would be the same across countries was a big mistake," says Constanza. Recognizing that Mexico's tax rules were more complex, the team decided to develop a new system tailored specifically for Mexico.
Another challenge was navigating the cultural and operational differences between the countries.
There are significant cultural differences from one country to another, Constanza notes, highlighting the importance of understanding local nuances. Additionally, networking proved crucial. When expanding in Latin America countries, networks are essential, from raising funds to acquiring clients, she adds, stressing the importance of local connections for building trust and gaining traction. - Constanza Martinez, co founder of Taxo
Founders
Constanza Martinez, David Paredes, Jacobo Moreno.
Traction
Despite these challenges, Taxo aims to deepen its presence in Mexico. The team plans to grow their customer base by 160% and reach 200,000 tax declarations on their platform in 2024.
Currently, Taxo has more than 11,000 taxpayers and 900 accountants using Taxo’s platform in Mexico processing over 100,000 tax declarations.
Taxo’s current product roadmap includes adding new services like an API for enterprises and tax payment for individual taxpayers "Taxo enables accountants to reduce operational work by up to 90% to focus on advising their clients better and acquiring more of them," says Constanza.
Funding
2024, $1.2M (Pre-Seed) including Seedstars, Newlin, Buentrip Ventures and 500 LATAM.
Market Opportunity
Taxo has an opportunity to grow in Mexico and Latin America. Currently addressing individual taxpayers and soon to enter SMEs with their API, which are the lifeblood of the Latin America economy. Across the OECD, which includes many Latin American nations, these businesses account for 99% of all businesses and contribute between 50% and 60% of value added providing a large market for accountants who utilize Taxo's services, as many SMEs struggle with managing accounting and tax tasks efficiently (OECD SME Policy Index).
