Making VAT Digital: How greater digitisation is changing the game for PKF Ignite
We’ve already seen the transformational role that digitisation can have on businesses. One area it can make a real difference is tax. Expanding the taxpayer base is a vital step in the long-term development of our economy, and tech has a key role to play.
Recent tax statistics from the South African Revenue Service (SARS) revealed a higher tax collection rate in December 2020 for personal income tax and corporate tax than the previous year. Similarly, eFiling accounted for 81.2% of the total value of all taxpayer payments in the last tax year.
Digital advancements – like eFiling – that make it smoother and easier for small businesses to pay their taxes are vital. That’s why we’ve been working closely with SARS to develop a new set of tools that allow businesses to prepare, store and then eFile their VAT returns directly from Xero.
Earlier this year, PKF Ignite became the first Xero partner to file live VAT returns for their clients directly from Xero to SARS.
We speak with Nicole Rousseau, Head of PKF Ignite, who has been using the eFiling feature over the last few months about her experience and why she believes technology advancements are so important for the industry.
As the first firm in South Africa to eFile VAT returns directly from Xero to SARS, how have you found it?
It has made a massive difference at PKF already. The streamlined workflow just makes sense and this additional feature has enabled us to eliminate multiple manual steps.
Filing taxes is one of the biggest pain points for accountants and our small business clients, and a major drain on resources – especially now, as businesses are stretched thinner than ever. So being able to create, store and then file VAT returns all from one platform without having to leave Xero is saving us a lot of hours and manual work.
What are the main benefits of using direct eFiling between Xero and SARS so far?
The major benefits are increased data accuracy, improved efficiency, time saving and streamlining of our processes. The ease of use and ability to submit the return with a click of a button has left our team astounded at how technology can really change the game for tax.
Our old process had a lot of manual steps as well as checks and balances to ensure the figures were correct. We also had to have an additional review step in place to ensure the VAT201 return had been completed correctly before it could be filed. All these processes have now been replaced with one streamlined workflow.
How are new digital tools like Xero’s VAT 201 form, late claims functionality and eFiling supporting the industry?
This functionality has made it possible for us to manage and keep track of our clients’ VAT compliance in a single workflow – which is key for any accountant or business owner. It’s a significant step forwards for digitisation in South Africa as well as making tax compliance less admin intensive.
The fact that Xero has developed a tool that can calculate the VAT return, include any late claims, and make it possible to submit to eFiling via the Xero dashboard is revolutionary for our industry. Not only does it save time, but also reduces a lot of errors and makes compliance pain-free.
How is technology more broadly helping you streamline processes and provide better support for clients?
When PKF Ignite started on this digitisation journey, we went back to the drawing board and re-defined what type of firm we wanted to be and what service our clients needed from us. Xero was the only choice because it enables us to get closer to our clients and really entrench ourselves in their businesses.
The automation that comes with using Xero takes care of a lot of mundane tasks, freeing up our time to really add value to our clients. Our small business clients now have a proper handle on their finances and are able to make informed business decisions based on the real-time data.
Do you think we need to see greater digitisation in other areas and a bigger drive to promote digital tools?
Digital processes make a business more efficient and profitable. They also lead to greater collaboration, higher productivity, enhanced customer engagement and more accurate insights. We’ve seen first-hand from our clients that businesses who adopted tech were able to more easily pivot during the global pandemic and experienced minimal disruption.
Technology adoption is no longer a choice – it should be a business strategy. If the Government can promote or incentivise the use of digital processes in a more structured way it will go a long way in encouraging business owners that are still hesitant to adopt cloud platforms.
Find out more about how you can simplify VAT submissions for your business or practice here.
The post Making VAT Digital: How greater digitisation is changing the game for PKF Ignite appeared first on Xero Blog.
Source: Xero Blog
