In an era marked by geopolitical uncertainty, evolving regulations and rapid technological advancements, tax leaders face unprecedented challenges.
The global tax landscape is more dynamic than ever, with jurisdictions implementing measures to protect their tax bases and incentivize climate-friendly investments. Additionally, the rise of generative AI (Gen AI) and the shortage of tax talent are reshaping traditional tax roles and operating models, putting significant stress on tax functions.
Navigating the forces of change in tax explores these complexities, offering strategic imperatives and actionable insights to help tax leaders navigate the forces of change.
The publication highlights three key areas tax leaders should prioritize to create value for their organizations and outlines key steps to help achieve these goals and gain a competitive advantage.
Key themes
Tax functions are under immense pressure due to evolving regulations and fast-changing global events. For instance, 79 percent of respondents in the KPMG 2024 CEO Outlook believe trade regulation will negatively impact their organizations, while 56 percent express concerns about regulatory demands.
Generative AI (Gen AI) is set to revolutionize tax practices by automating compliance, enhancing data analysis, and improving decision-making processes. The KPMG 2024 CTO Outlook Study indicates that 29 percent of tax functions are already deploying Gen AI, with an additional 26 percent exploring its use.
With the growing demand for skills in emerging technologies, tax leaders must focus on building agile teams equipped to handle the complexities of modern tax environments. The KPMG Global Tax Function Benchmarking Survey reveals that 44 percent of respondents identify employee recruitment and retention as the biggest disruptor impacting the corporate tax function.
A Nordic point-of-view of the tax function today
The current landscape of tax functions in the Nordics is marked by increasing compliance demands and evolving tax policies, which challenge organizations to adapt swiftly and strategically. Embracing technological advancements, particularly Generative AI, emerges as a crucial solution, enabling tax teams to manage compliance efficiently while freeing up resources for strategic initiatives. As tax professionals navigate the complexities of regulatory changes and geopolitical challenges, leveraging AI not only enhances productivity and compliance but also positions organizations to gain a competitive edge in an uncertain future. By focusing on technology, transparency and adaptability, tax functions can transform into strategic partners that drive value and resilience in a rapidly changing environment.
”In Denmark, the future of tax is not just about compliance; it's about transforming tax functions into strategic growth partners. Exploring proactively how AI can transform the tax function is crucial and ensures resilience in the face of evolving tax policies and geopolitical challenges.”
"While navigating the current instability in tax policy, tax functions must remain focused on the transformative power of generative AI. This technology not only reshapes our profession but also fundamentally alters how we work and cultivate talent. Embracing Gen AI allows tax professionals to adapt to new roles, enhance productivity, and ensure compliance, thereby securing a competitive edge in an unpredictable future."
"As we navigate the future of tax, it is crucial to focus on the key actions outlined in the report, such as embracing technological advancements, enhancing transparency, and adapting to new regulatory frameworks. Furthermore, we must also remain vigilant about the changing political landscape, which poses significant challenges to taxes and trade tariffs. The evolving geopolitical dynamics can impact tax policies and trade agreements, necessitating a proactive approach to mitigate risks and seize opportunities in this uncertain environment."
"What I hear from clients is that tax teams are feeling overwhelmed by the sheer volume of new compliance obligations, without corresponding resource increases. For these organizations, a strategic adoption of technology, like Generative AI, offers a crucial way forward. This approach is vital to effectively manage compliance, liberate time from routine tasks, and reclaim capacity for strategic contributions."
Key actions to help transform the tax function for the future
Despite these challenges, there are significant opportunities for organizations to transform their operating models and enhance their strategic role within the business. By evolving in tandem with other business functions, tax teams can deliver greater value and position themselves for success in an unpredictable future. Some steps to consider when building a tax function ready for the future include:
