MobiVAT

Features

Why Choose Us?

The VAT amount element is detached from the buyer’s payment and is remitted electronically to the tax revenue authority from the buyers’ bank account. In doing so VAT never reaches the account of the merchant

FEATURES- MOBIVAT BUSINESS MODEL

MOBIVAT is a system tracks each transaction, provide ability to block fundsso that they reach the merchant bank account by using split payment mechanisms, and ensures thst that allowable VAT reclaims are paid rapidly and authomatically in case of electronic payments the VAT-CLAIM can be process on the same day as the collection.

1

Intervening in the payment and collection cycle in a most effective way to ensure the VAT is paid by tracing the transaction real-time

2

Removing the need for merchants to collect and account for VAT on behalf of their Tax Authority, and removing the opportunity for collected VAT funds to be misappropriated; Monitoring the full supply chain B2B, B2C ...cash/eft/cc;

3

The VAT element is split off from the buyer's paymeny and is separately (electronically remitted to the tax authority from the buyer's bank account; the VAT never reach the merchant account).

4

With EFT the refund of deductible VAT is possible same day the VAT is received by the TAX Authority

MERCHANT-SOFTWARE VENDOR INTEGRATION

1. MobiVAT gateway is designed as aprocessor agnostic gateway using pluggable architecture and is not tied to a specific bank or a specific credit card processor to handle electronic payments

2. MobiVAT gateway exposes a simple, unified API that can be used by merchants and software vendors to split payment and send credit card transactions and RTGS payments to payment processors and banks of their choosing in a completely transparent way.

3. In the context of payment processors, this payment process is realized through the split payments mechanism that implies distribution of the transaction amount between the Merchant and the Tax Revenue Authority according to particular split rules, for real-time or batch transactions. The split payments mechanism involves two phases: transaction processsing and remittance

4. Once transactional data is ready for remittance, MobiVAT Gateway will send two separated transactions to the Payment processor to be remitted respectively to the Merchant account and the Tax revenue Account. It is to be noted that the card processor will be hit by too separate transactions Merchant and KRA and process them accordingly.

STRATEGIC APPROACH

VAT Reform recommendations

The transformational impact of using today’s technology to address the challenges of VAT collection is the sole purpose of MobiVat.

The MobiVat solution disruptively alters the existing collection paradigm. The MobiVat platform will provide features to support initiatives discussed below:

Introduction of a light Electronic Billing Machine - EBM

Merchants do not need a device connected to the Internet to participate. A customer initiated sale removes this burden from the merchant’s responsibility and the transaction can be completed by the customer’s phone enabled with USSD, SMS or a smart mobile app. An electronic EBM receipt can be generated and sent to the revenue authority on each sale. Additionally, merchants can be categorized based specific requirements.

Strengthen consumers’ participation in VAT compliance

An incentive system that provides direct tax free credits to the consumers’ social benefit programs when goods and services are consumed and only when an EBM signed receipt is issued by the merchant is more appealing and has value.
This creates an incentive to the taxpayer who must insist on a legal receipt for every purchase in order to earn the credit. MobiVat will automatically instruct the merchant’s bank to transfer the VAT payable to the account of the revenue authority.

Engage the media to promote consumers’ participation in VAT compliance

Incentivization schemes must be communicated to the consuming public to ensure awareness and encourage adoption.

Merchant Incentivization

The intrinsic nature of VAT compels merchants to act as agents of the tax authority and this effort should be recognized by incentivization by providing a tax credit that is a small percentage of the VAT liability.

Implement mechanisms to handle different payment types (cash and cashless) and also collect VAT

Customers who elect to transact cashless may use a phone-based app, USSD or SMS session to initiate the transaction and pay from a digital wallet. The same process will automatically transfer the VAT to the tax authority from the merchant’s bank account. A cash payment can be initiated by the merchant using low cost device to conduct the sale and transfer the VAT from latter’s account to the tax authority. Electronic receipts are issued for all transactions.

MobiVat strengthens the credit worthiness of Least Developed Countries (LDCs)

Given the real-time nature of MobiVat, donor countries can directly monitor of the pulse of tax collections of an LDC that is a loan recipient or has received financial guarantees from institutions such as the World Bank/IMF. This technology also strengthens the confidence of a potential donor at the assessment and also at collection stages.

Conclusion: Since the introduction of VAT in the 1950s global and domestic markets have experienced unprecedented growth along with the rapid emergence of digitalization and the growth in e-commerce. The reduction of the VAT gap in early economies is costly and difficult especially in countries where economic unions exist such as the European Union. LDCs such as Sudan do not have such challenges. Implementing a real-time VAT solution discussed in this document is feasible in countries with relatively small but growing tax base or without an effective collection platform. MobiVat Limited, the creator of the MobiVat technology implements a split payment approach when the transaction occurs. The company proposes the transfer of this technology to a partner Revenue Authority on a build, operate and transfer arrangement.