As Chile weighs mandatory e-receipts, Sovos eyes partnerships

Chile is an electronic invoicing trailblazer and the government now wants to digitize the receipt-issuing process – which tax compliance software giant Sovos considers a major opportunity.

The proposal forms part of a wider reform bill in congress designed to simplify tax rules, spur investment, trim red tape for SMEs and boost tax collection rates.

In Chile, Sovos primarily serves large corporates – clients include retail heavyweights – but is today considering offering SME-focused digital receipt solutions in partnership with other providers.

In Chile, as in the rest of Latin America, SMEs are major job generators and account for the bulk of businesses.

“If you look at the whole economic structure, more than 50% of the economy is driven by small to medium-sized businesses and they work with boletas, receipts,” Rodolfo Esquivel (pictured), regional commercial director at Sovos, told BNamericas.

“So the e-receipt is an extremely attractive market…it’s the biggest piece of the economy so we are looking at solutions to basically go after the e-receipt,” Esquivel added. 

Because the business model Sovos operates under is geared to large corporates, collaboration is the way forward, Esquivel said. 

“The way we think about doing this is through partnerships. There are already a lot of players in the market that are working with the small to medium-sized businesses. So it’s about how do we partner up with them to provide them with an e-receipt solution that makes it a win-win proposition for everyone.”

Under the government’s plans, all merchants would be required to issue
e-receipts through a platform, such as an all-in-one cash register, connected to the systems of the inland revenue service (SII).

On the government’s e-receipt proposal, he said “It’s massive. It will formalize a very informal part of the economy. It should be an uptick for the overall economy … and we want to be there.”

Owned by British private equity firm Hg, Sovos entered Latin America in 2016 after purchasing compliance software company Invoiceware, followed by e-documents firm Paperless in 2017. Present across the region, Sovos has offices in Chile, Peru, Colombia, Brazil and Argentina.

Sovos solutions manage all aspect of the tax compliance process, from tax calculation and forms completion to funds transfer to government revenue departments.  

Chile started implementing electronic factoring rules in 2003, the first country in the region to do so. Issuing these documents digitally is now mandatory. The likes of Peru and Colombia have followed suit.

Amid the unrest in Chile, the government has introduced measures to help bolster the SME segment, such as injecting capital into state-run bank BancoEstado to support business lending.