The Bocconi Alumn Who Wants to Make Taxes Easier. With an App

LUCA RAI AND A PARTNER RUN EASYTAX ASSISTANT, A STARTUP HOSTED BY THE SPEED MI UP INCUBATOR

The fourth most complex nation in terms of accounting and tax compliance is Italy, according to the Financial Complexity Index 2018 from Tmf Group. A startup incubated in Bocconi uses the digital technology to democratize the access to tax system, shortening the distance between taxpayers and lawmakers. EasyTax Assistant was founded two years ago by Daniele Pace and Luca Rai, the latter an accountant and Bocconi alumnus. «Even though smartphones have changed our lives, taxation is not yet in step with the latest developments in technology», they say. «This is an issue for 41 million Italians».
 
Daniele Pace, 33, has an Economics degree. He worked as a consultant at Accenture, Canon and Reply. Luca Rai, 33, graduated in Economics and Finance from Bocconi in 2007 (Pictured above, from left, Pace and Rai).  Two years later, he received a Master of Science in Finance. «I was interested in corporate finance, so I joined an accounting firm. That’s when I understood how many low-value activities an accountant does». Luca Rai still has ties with Bocconi and since 2011 he is teaching assistant at the Corporate Finance and the Financial Risk Management courses. «We complement each other», he says looking at his partner in EasyTax Assistant. «I bring the point of view of the accountant, he brings the mindset of the taxpayer». They work with four other people, or «easytaxers» as they call them.
 
EasyTax Assistant is an app that helps taxpayers to manage passive accounting, a digital assistant designed to optimize tax savings and to facilitate relationships between lawmakers, accountants and taxpayers. It takes note and calculates day-to-day expenditures. It offers tips on how to save money and change the cost behavior for the better. The categories that can get the most out of it are employees and self-employed professionals with a limited turnover.
 
The app does essentially three things. It provides information on all tax breaks to which the user is entitled, in order to reduce its tax burden. «The taxpayer does not have to declare his annual income, except for a proxy value which serves as a calculation parameter». Then, EasyTax Assistant provides a way to store and classify any expense by taking a photo of the invoice. The system automatically retrieves all the useful information and puts it in the right category. «Our algorithms constantly provide information on tax management, allowing users to pay the right expenses, at the right time. The taxpayer is thus more informed and more responsible. He realizes how much he can save and is therefore less inclined to make payments off the books».
 
The company was established in late 2016. The app was designed in six months and a beta release was launched in June 2017. It was downloaded by 20,000 people in a six months span. In February 2018, the startup was admitted in Speed MI Up, the business incubator of Bocconi University and the Milan Chamber of Commerce. «We were contacted by many incubators, but they asked a share of our company’s equity in return. Despite not entering the company’s capital, Speed MI Up showed a strong commitment. The incubator and Bocconi University were of great help». Mikkel Draebye, who is tutoring the startup and teaches Strategy and Entrepreneurship at SDA Bocconi School of Management, says that «EasyTax Assistant is part of a trend of apps that help manage administrative processes. It is a useful tool especially for the wider and wider category of self-employed professionals. It helps align the interest of the accountant with the interest of the taxpayer».
 
EasyTax Assistant does not aim to replace accountants. It makes their job easier, instead, by relieving them of low-value activities Luca Rai is talking about, such as the cataloguing of expenses. The accountant can work throughout the year on a digital platform or export his client’s tax history before the deadline in a file that can be read by any software. «We are in touch with trade associations», Luca Rai says, «and we are working on a partnership with important Italian Centers for Fiscal Assistance to test a version of the app that is fully integrated with their system». The founders are not worried about the pre-filled tax return that was launched in Italy in 2015. «It was used by 2.4 million people, less than you may think. It makes citizens feel less responsible and pushes them to blindly trust the pre-filled data. EasyTax Assistant does the opposite: this is a tool that allows people to keep track of all their expenses».
 
The startup has a freemium business model. A Starter version is designed for users with a simple tax profile. «It is and will always be free because of our social mission: to democratize the access to tax management». A Silver version (9.99 euros a year) is for taxpayers with more complex needs. A Gold version (59,99 a year) was launched for the Tax Freedom Day 2018, the day that the average taxpayer has earned enough money to pay off his obligations (June 20 in Italy). It is produced in partnership with Datlas, a young company in the business process outsourcing industry. Among other things, the Gold version provides for the legal value of electronic documents. «Now, we would like to go international. We are moving the first steps in France, England and the Netherlands». 

by Claudio Todesco