Sep 21, 2018

Senegalese fintech startup Sudpay is helping municipalities track the digital collection of taxes in a bid to cut down on fraud and ensure funding for services. Formed in 2014, Sudpay has developed Townpay, which allows municipalities to control their tax base and track the collection of taxes. The solution works both online and offline, and allows for the efficient, transparent collection of dues. The startup is still piloting its solution, but has already achieved some notable landmarks. It is revenue-making, via a two per cent commission on taxes collected and further commissions on additional services like digital credit and retirement savings offered by financial institutions through its platform. Last week, Sudpay was named winner of the Senegalese leg of the Seedstars competition, earning the chance to pitch for up to US$1 million in equity investment at the global final and Switzerland next year, while it also secured grant funding from the GSMA earlier this year. Samba Sow, the chief executive officer (CEO) of Sudpay who co-founded the startup alongside Pathé Faye, said municipalities had financial responsibilities for things like education, health, power and roads, all financed by collection of local taxes. However, the tax fraud rate stands at more than 40 per cent, and very few municipalities collect more than 70 per cent of due local taxes. Sudpay looks to solve this problem, allowing people to pay taxes via mobile money or directly through the Townpay mobile app. “Our digital platform makes it possible to identify all taxpayers, as well as the type of taxes they have to pay. Our solution allows municipalities to geolocate the activities of the taxpayer. The solution also works in offline mode for the municipalities that are in rural environments,” Sow said. Funded through its own revenues and the GSMA grant, which allowed it to conduct its pilot , Sudpay is looking to raise a US$2.5 million funding round to expand its solution across Senegal and also into Ivory Coast and Guinea Conakry. “We have an expansion plan for 16 countries in West Africa. The business plan for the development plan for 16 countries is being finalised,” Sow said. Early difficulties revolved around the refusal of certain taxpayers to register for the platform, which Sudpay has tackled by offering additional desirable services to encourage usage. “This difficulty has been solved by linking taxpayers who are up to date with the payment of their local tax with microfinance institutions for credit. Now those are the taxpayers who come to register for free and pay their tax to benefit from the digital credit,” said Sow.