Odoi Yemoh is the Founder and Executive Director of Reality Capital Management. Established in 2009 and based in Toronto, Canada, the firm offers tax preparation and planning, accounting, payroll, unemployment consulting, personal household budgeting, loan analysis, product management and marketing, as well as QuickBooks training and support.  

What would you say are the advantages and challenges of providing effective tax advice in Canada? In your opinion, how complex is the tax system in the country?

Providing effective tax advice in Canada is done through tax planning, which helps Canadians with reducing their income tax burdens through pension income splitting, RRSPs, Registered Disability Savings Plan (RDSP), Open Tax Free Savings Accounts (TFSA) and many more. There are also other benefits for employers, however, the generally expenses incurred by an employee are not deductible and there are certain specific exceptions. However, depending on the employee’s relationship with their employer, there may be unforeseen tax problems too, such as purchase employment assets, the benefit of using company car, loans from your employer, etc.

Canadian business owners find the tax system unfair because:

• Most new businesses have losses in their first few years after incorporation. However, the losses will be retained by the corporation and can be used against future corporate income.
• Corporate owners may have personal assets in the corporation or may be using money from the corporation for personal purposes, which may include unintended tax issues.
• Some owners tend to take out assets from the corporation, which then triggers personal tax consequences.
• Investments held inside the corporation are subject to tax rates, which typically are higher than the top personal tax rates
• Corporate income is taxed and the income flowed out by dividends is taxed too. While there is a measure of integration to reduce double taxation, some double taxation on dividends is still evident.

The Canadian Government has been imposing strict rules and regulations, which are preventing individuals and business owners from making profits. Individuals gain more from tax saving due to the benefit given to them. This makes it difficult for business owners to create jobs for the young people or strategize their business, because they are taxed based on their revenue and they’d rather lose in tax saving.

In what ways has the Canadian tax system transformed throughout the last 2-3 years?

Each year, the Canadian tax system becomes more complicated. The personal income tax was extended to most of the working population at high, progressive rates, and the corporation income tax was raised drastically and applied to excess wartime profits. Through the tax rental agreements, income tax jurisdiction was transferred from the provinces to the Federal Government. The point was to make income taxation the principal source of federal government revenue for financing Canada’s war effort and to lay the basis for financing the post-war welfare state. For a few years, the Federal Government has been mandating to make amends on the tax system for small business owners and this makes us think that there is a legitimate issue in trying to create tax fairness for all Canadian people. The Government has been trying to improve the fairness of Canada's tax system by closing tax loopholes and amending existing rules to ensure that the rich pay their fair share of taxes and that people in similar circumstances pay similar tax.

As the Executive Director at Reality Capital, how are you developing new strategies and ways to help your clients?

Reality Capital Management helps clients with accounting, taxation, auditing and financial services with the oversight of experienced accountants. We offer defining the profitability of companies through our financial education courses. Our clients are usually individuals and small businesses including Non-profit organizations in Greater Toronto Area (GTA) and outside of Ontario. Currently, Reality Capital Managements expanded on budgeting and debt consulting courses to the public, allowing students to make valuable financial management decisions. Developing these strategies helps us to serve our current and future clients better.

Contact details:
Odoi Yemoh
205-2200 Martin Grove Road
M9V 5H9
Toronto, Ontario.
647-388-5751.

It’s a question on everyone’s lips at the moment, and though we know what trends are emerging, the progress therein is rapid and you might just miss it, so what does the future hold for the fintech sector? Nicholas Gill, Founder & Strategy Partner at Team Eleven, gives Finance Monthly his thoughts on the matter.

Living in a world that is rapidly evolving, all business sectors need to be able to innovate and adapt to keep up with changing and exacting consumer demands. This is no different, and perhaps some may say, even more crucial, in fintech. The rate at which this sector is developing is mind-blowing. Fintech is becoming an increasingly important part of how traditional banks are trying to gain competitive advantage. It is no longer possible for them to survive on sentiment and legacy and they face the constant challenge to prove their transparency, ethics and efficiency.

The smartest operators are driving investment for tech-based start-ups, have embraced the bots and are actively trialling innovations like blockchain. Blockchain was initially designed to make financial transactions quick, cheap, easy and most importantly, trustworthy between people who don’t know or trust each other. It is now increasingly being implemented, acting as a further assurance of safety and privacy.

Fintech has already come a long way since its infancy in the 1950s which saw the early incarnation of the credit card. It took almost two decades more before we saw the next big innovation - ATMs descending onto our highstreets. Since then the change within the financial sector has been rapid especially after the introduction of the World Wide Web. This paved the way for online stock brokerage websites, massively changing the fintech structure into what we now use every day. Post the introduction of the internet, the pace of change was unheralded – it feels a long time ago that we were wary of online financial transactions, and only a very few were even using online banking, let alone apps.

Those early and rapidly evolving changes underline the financial sector is all about developing and building on previous trends. Take social media platforms Instagram, Facebook and Twitter, there was a time when they were keen to direct their users straight to the purchasing website if they saw a product they liked. Twitter quickly changed its mind though and killed the instant buy button after taking notes from research suggesting consumers wouldn’t take notice. However, following the success of Amazon, and how the one click buying has evolved into a hugely successful mobile platform for the company, Instagram is now keen to develop the idea itself. When a brand as big as Amazon makes it work, it changes the consumer mind-set and consumers’ expectations adapt accordingly, so the investment from Instagram is not surprising.

We live in a society where everybody wants the latest tech products, whether it’s from the newest phone to the latest VR headset, so why should it be different when it comes to our finances? Consumers look for much faster shopping experiences, whether it be online or in store with the introduction of contactless payments.

As consumers’ behaviours change, we increasingly expect similar advances in our working lives, and fintech is now making strides in the B2B arena. The huge spend from Intuit in the UK on QuickBooks is a great example. I run a medium sized ad agency with billings approaching £2m using QuickBooks. We don’t have a Financial Director, but I am comfortable with the information available to me online via my mobile app. I can give accurate forecasting information in meetings from my app, and even submitted a quarterly VAT return from the gym.

More and more, fintech is helping consumers manage their finances themselves with millennials being a driving force for the shift from in-branch to digital channels. With increased competition and demand, this is set to accelerate in 2017. To be able to compete with the likes of Paypal and Apple Pay, traditional banks must optimise their digital channels. Already, the start of 2017 has seen Paypal introduce its first bot which enables Slack users to make payments without leaving the conservation. As consumers become better acquainted with the new trends, their confidence increases with the process of using these intelligent robots. This already started taking place last year as UK banks began adopting AI to speed up processes. RBS for instance started implementing intelligent robots online to help customer interactions. This year will definitely see an influx of bots into our lives, especially within the finance sector, whilst humans start taking a step back.

Another advance that is going to see less human involvement is the development of blockchain. Created a few short years ago, blockchain is already being used in many different ways, including by the Estonian Government. They are using the new technology to secure all of the country’s health records which will ensure everyone’s data is retrievable and will eliminate the potential for doctors or the government to cover up any changes to healthcare records. Again, this new technology will cut out the middle man, creating equal opportunity and distributed value through decentralisation. For instance, artists will be able to receive more than 90% of their income, without the need for managers, production companies, record labels etc.

Consumers are leading the way in how services need to be orchestrated and it’s up to the brands to make sure they keep up with them if they are to retain their competitive advantage.

Traditional banks were arguably late to the party, but innovation now seems finally to be at the top of their agenda, and not for its own sake. They are listening to consumers and are beginning to partner with tech start-ups to open their digital channels which will also keep them relevant to many of their customers.

But these big, household name brands have built their reputations on security and privacy, so their innovation must also reassure their traditional consumer. Blockchain scores highly in this area as it is one of the most secure services to date, which is key to all consumers whether they are early adopters of tech or not.

By the end of the 2017 the fintech sector will have massively changed again as technology and consumer demand accelerates - and I for one look forward to seeing the progress.