Tax is changing faster, and more dramatically than at any time in history.
Technology is underpinning a paradigm shift in the role of tax professionals. It’s driving digitalisation by tax authorities, greater availability of tax data, and new levels of computing power with which to process and analyse that data.
At the same time, stakeholders are demanding transparency of firms’ tax arrangements, and an ethical approach to disclosing and paying tax.
In this climate, KPMG has identified five major trends that are transforming the future of tax, and that every tax leader should be aware of.
1. Reliance on strategic partnerships
Tax leaders can’t navigate the future alone – for two reasons.
Firstly, there’s too much data out there, and the world’s tax authorities are increasingly exchanging information with each other. And secondly, in a digital world, effective tax operations require dedicated technology.
Tax teams will need to establish networks of tech and data partners who can offer access to modern capabilities, and a global perspective on their tax position.
2. A shift to real time
Tax compliance has traditionally been a retrospective exercise. But authorities are now demanding direct access to organisations’ tax data – in real-time.
Compliance will need to be baked into an enterprise’s tax systems and processes to cope. Tax must be closely integrated with the rest of the business; and shift from being a reactive reporting function to a proactive modelling and forecasting unit.
3. Changing skills profiles
A core skill for today’s tax practitioners is the interpretation of legalisation and cases. But the tax professionals of the future will be just as adept at tasks such as data analytics and forecasting.
Tax leaders must equip their teams with such abilities – not just technological competences, but commercial capabilities too.
4. Reduced response time
Adapting retrospective tax processes takes time. But slow won’t cut it when authorities have direct access to companies’ tax data, and expect real-time compliance.
The future of tax is agile. Tax leaders must know where the data they need sits, and how to rapidly access it, so that they can quickly and easily report on it.