According to the Philippine Inquirer, 99.52% of all businesses in the Philippines are considered as MSMEs (micro, small, medium enterprises). Running a small business that requires filing taxes has been notoriously challenging. With several tax cycles within a single year, a ton of literal printed out paperwork, and physical filing requirements, a lot of small business owners end up spending an inordinate amount of time figuring out how to comply instead of actually running their businesses.

This is something that Ginger Arboleda experienced firsthand when trying to kickstart her own business several years ago. After working for Unionbank as a project manager, Ginger wanted to start her own business called Manila Workshops, an events company with the aim to help the people around her find their dreams.

She got the business running but then realized that there is a huge amount of administrative work, specifically tax filing, needed. Seeing how this pain point is pretty common with the people around her, she came up with an idea to start a business to help small business owners. For this, she also enlisted the help of her husband, EJ, who had experience with software management in Procter & Gamble and Hewlett-Packard, and was then currently the CTO of an ad agency in Manila, to see how tech can push this idea even further.

Tackling one problem to make a big impact

With their idea in hand, Ginger and EJ, joined a startup accelerator event in 2010, organized by IdeaSpace, with a broader idea of helping out small businesses. They started out by thinking of a budget tracking app, which later then evolved into a full-on accounting system. During the IdeaSpace program - they later learned that instead of tackling broader problems, they should first focus on a specific but relevant pain point, before expanding their scope. This is when they stumbled upon tax filing as one of the things that small businesses have a problem with - thus, the start of Taxumo.

Key Partnerships with the Philippine Government

For the longest time, the BIR (Bureau of Internal Revenue), the tax agency of the Philippines, enforces policies and regulations that have been out of touch with technology. From requiring businesses to keep paper receipts for at least ten years to having your server physically checked and verified (with a small, signed sticker) when you don’t have paper receipts, a lot of process related tasks are in need for an update. Instead of “disrupting” the space as most emerging tech start-ups opt to do, Ginger and EJ actually decided to work with the BIR through a partnership in order to help improve these processes. 

From their initial talks with the BIR in 2016, Taxumo was finally accredited as a TSP (Tax Software Provider) in 2018, with the help of USAID, thus allowing them to use their software to partner directly with the government. EJ thinks that if they are able to create change in the BIR (historically one of the least trusted agencies), then they will be able to affect change most elsewhere.

One of the biggest things that Taxumo has helped with was allowing Filipino small business owners to file and pay taxes from anywhere. Filing taxes used to be done very manually - from registering at an RDO (Regional District Office), printing out multiple copies of forms, and physically filing them in the offices. This had to be done around eight times a year. Taxumo was able to work directly with the BIR in order to make this much more seamless.

Making Tax Filing Simpler for Thousands of Filipinos

Taxumo is currently the most widely used tax compliance tool in the Philippines. Instead of a slow physical process, Taxumo allows anyone, from freelancers, self-employed professionals, or small business owners to pay their taxes anywhere, anytime. 

The main target market of Taxumo has been what’s called the “hard to tax” market, such people who usually work from their own homes, and are usually not bothered to go through the previously arduous process. From helping them generate multiple forms, attaching submissions, real-time tax calculations, and finally providing a wide range of payment options, from credit cards, e-wallets, or even through your closest pawnshops and convenience stores - Taxumo has made tax filing easier for Filipinos who are striving to make their own money and make an impact. 

With an unforgettable 2020 and with the lives of Filipinos around the world seeing a massive shift in online usage, Taxumo has seen a huge growth in users. Since the start of the lockdown, they have seen more than five times the growth in monthly sign-ups as more people look for ways to file their taxes from the comfort and safety of their own homes. With Philippine unemployment rising from 5.3% in January 2020 to as high as 17% in April according to Rappler, there’s also a larger trend of people starting their own small businesses from their own homes in order to get by.

Moving Beyond The Taxes

Ginger and EJ believe that the work has only just started. One of the recent trends they’ve been encountering is that there are a high number of users who sign up with Taxumo prior to officially creating their business as curious future business owners. They are looking for information on how the tax process would look like but don’t know where to go. From this, Taxumo has also started a service called Taxumo BizReg where they offer assistance for people to start their businesses in a financially law-abiding way, whether you’re a licensed or non-licensed professional, sole proprietor, or corporation. Business registration and tax filing are just a some of the many things that small business owners have to think about. Ginger and EJ ultimately aim to give time back to small business owners and eventually even help out with things such as financial management and financing.

In addition to running Taxumo, Ginger also promotes women entrepreneurship in the Philippines. She knows that there is a lot of potential for women entrepreneurs in the country seeing how 67% of Taxumo users are female. She believes that one big barrier for women to start their own businesses is self-doubt, wherein women doubt themselves and are unsure if they can become CEOs in their own right given the lack of representation of female self-made CEOs. This is an area that Ginger would like to address as she heads the Lean In PH network from Sheryl Sandberg’s global Lean In initiative and runs a blog called MommyGinger.com. EJ and Ginger have a message to fellow Filipino entrepeneurs:

Many people think that just because someone was successful, they made all the right decisions immediately. All of us are on different journeys. At one point, you’ll think to yourself: do I want to be a good CEO or a good person? The real answer is that you can be both at the same time. Don’t compare yourselves with others who are seemingly doing well—luck has a big role to play with business. Aside from looking at what went well, it’s more important to look at the what went wrong.

Entrepreneur Stats

NAME EJ & Ginger Arboleda

COMPANY Taxumo

LOCATION Taguig City, Metro Manila

EDUCATION University of the Philippines (EJ), University of Asia & the Pacific (Ginger)