As the e-tax system improves, more people will gain confidence in submitting their returns online
Melbourne, Australia (PRWEB) January 05, 2013
The Tax Preparation Franchises industry will not diminish in significance; however, the rise of tax submissions via the internet may dampen industry participants' exuberance. According to IBISWorld Industry analyst Ee Jen Lee, ‘the global financial crisis, which resulted in the loss of jobs and income, led to fewer tax returns being lodged’. Of those lodged, those lodged via e-tax grew while those submitted through agents and various means fell. Although the industry experiences less swings compared with the overall economy, its fortunes are undoubtedly tied to employment conditions. Consequently, over the five years through 2012-13, industry revenue is forecast to grow at a compound annual rate of 0.7% to $180.7 million. After a strong recovery in 2011-12, growth in 2012-13 is comparatively mild at 2.3% as economic conditions are expected to remain dour.
Although tax consultants remain indispensable to many with complex investments and inheritance matters, many more Australians are transitioning to the e-tax system. As further improvements are made to the e-tax system, more will gain confidence in submitting their returns online, thus further eroding industry revenue. Already, existing industry participants are battling off competition from independent sole proprietors, which can offer more competitive fees as little capital investment is required. However, changing demographics and investment products are widening opportunities to expand the current business offering. As superannuation balances increase and more customers shift their balances into self-managed super funds, industry participants are expected to capitalise on their existing relationships to grow this area of service. ‘Existing arrangements with franchisees are restraining growth’, adds Lee. An incumbent running an obsolete business model is under great threat from new players that can expand their business in under-serviced areas more aggressively. With more scope for expansion, the industry is expected to grow over the next five years.
The Tax Preparation Franchises industry exhibits a high level of industry market share concentration. This is predominantly due to the franchise industry being dominated by two key players: H&R Block and ITP Australia. Tax preparation service providers are generally either independently owned accounting practices or large accounting firms with a global presence. The vast majority of firms in the industry have ten or fewer employees, including non-employers. Many of these firms also operate on a part-time or seasonal basis in accordance with the requirements of tax preparation services and the tax needs of customers.
For more information, visit IBISWorld’s Tax Preparation Franchises report in Australia industry page.
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IBISWorld industry Report Key Topics
Industry participants provide tax-return preparation services and operate as part of a franchise business structure. This industry includes businesses that are owned directly by the franchisor. Operators do not provide accounting, bookkeeping, billing or payroll process services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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