In 2017, there is a surge in seeking talent having an experience of Tax boutique firms in India. This can be mainly attributed to GST (Goods and Services Tax) implementation deadline issued by the Government of India. In this journey towards a newer tax regime, fresh avenues have started blooming since the last couple of months which has brought about 20% average avenue growth rate of niche tax firms.
Delayed implementation of GAAR (General Anti-avoidance Rule) and BEPS (Base Erosion and Profit Shifting) has added to the significantly broadened and deepened tax practices professional requirement in the market. The complexity of this subject is being taken up seriously by companies who want to avert all sorts of associated risks. The timing is certainly apt for carving out a niche for all the boutique tax firms in India.
Rise of niche professionals
Companies and entrepreneurs spend USD 1 billion annually on tax planning. The majority of this is taken up by the larger players in the market, especially the big four with their substantial presence in the global market. As the calendar nearing the implementation date of GST, Indian companies are rushing to bring in experts to help prepare their accounting and information technology systems for the tax-system overhaul. Helping companies to be fully compliant with the new system is difficult, as detailed guidelines aren’t yet available to provide the necessary clarity. This is creating a windfall for such niche professional services firms who are providing end to end solutions, unlike the traditional advisory firms.
Most of the organizations have started discussing taxation in board rooms trying to mitigate any risk arising out of it. This increased focus because of the associated complexity has increased the involvement of senior tax experts. In SMEs and promoter driven organization, preference for boutique and smaller firms have been there for many years as they are skeptical of sharing all confidential information which includes their personal taxation data with the larger firms. Additionally, senior level personalized attention by comprehensibly handholding the promoters by the boutique firms are fetching result for both parties.
These niche tax firms have a blend of unique, customized, highly effective approach that combines the mindset of a boutique with the resources of a large full-service firm. They provide granular details with an end to end solution till implementation. Their objective is to fulfill the clients’ long-term investment goals while providing high-touch personalized service.
Let’s look at some of the recent development seen in boutique tax firm industry.
• Recently, full-service law firm Khaitan & Co had hired two senior executives - Abhishek Rastogi and Rashmi Deshpande, from consulting firm PricewaterhouseCoopers to ramp up its indirect tax practice.
• Boutique tax law firm ASC Legal is set to merge with Phoenix Legal and promises to provide a full range of niche legal services to its clients.
• Shiva Nagesh, the head of indirect tax vertical in DLF Ltd, had joined Delhi-based boutique tax law firm Nitya Tax Associates as a partner.
• Dinesh Kanabar, former deputy CEO of KPMG founded a boutique firm named Dhruva Advisors.
• Ketan Dalal, former managing partner of PwC started off his own advisory company Katalyst Advisors LLP.
The last one year record shows that while a large chunk of the revenue is still with the big firms, the new boutique tax firm’s are seeing a faster growth with better opportunities in the coming days. Professionals working at boutique tax firms are working overnight and full weekends to cope up with the current workload at hand. It will be quite interesting to see if their bandwidth remains the same even one year after the implementation of GST. Let us wait to see how the boutique firms will shape up the industry in the coming years.