Molson Coors on getting greater value out of tax

These days, it seems that everyone – governments, investors, board members, the c-suite, the media, activists, employees and consumers – has an interest in the tax matters of large companies.

Under intense scrutiny, tax priorities have morphed beyond straightforward reporting and filing returns, to include the consequences of business and technology transformations, environmental, social and corporate governance (ESG) and the drive towards greater transparency.

So, today’s tax leaders are more present and visible than ever before. And the role is, excuse the pun, increasingly taxing. Dave Pickering should know. Dave is Tax Director at Molson Coors Beverage Company and admits “there are a few more grey hairs when I look in the mirror, which are a by-product of what we now face as a tax community.”

Dave’s former colleague is Lee Holloway. Now a Tax Partner at KPMG, Lee believes that tax has taken on a more strategic and operational role than ever before. “And the speed of business change means that tax has got to partner with the business and develop broader skills to fit the future landscape.”

“The speed of business change means that tax has got to partner with the business and develop broader skills to fit the future landscape.”
Lee Holloway, Partner, Tax
KPMG

For any organisation, tax can be one of the most significant costs. So, it figures, there must be opportunities for the tax team to interrogate that total tax cost and bring value back to the business. That might mean:

• Looking at processes to ensure that they are as efficient as they can be and that resources are proportionately focused in areas of greatest tax risk.

• Redistributing responsibilities between the tax team, the finance function, shared services and external advisers.

• More outsourcing to free up capacity or, conversely, bringing functions like compliance in-house to reduce costs.

• Going through the cost base and asking whether all available incentives and reliefs are being claimed and maximised.

• Tax payment deferrals.

“Draw up a big list and go after your top three opportunities,” explains Dave. “And once you’ve tackled them, go after your next three. If you do that, I guarantee you’ll bring value to the organisation and show your tax team in its best possible light. We need to celebrate what tax does and demonstrate that we really are in this together with our business colleagues.”

More than that, tax needs to be in the room whenever and wherever the business plans to spend money or make changes to its business model. If the operations team is looking at near-sourcing to save costs in the supply chain, the tax team can check for adverse tax consequences. Equally, tax can put forward alternative approaches: operating out of green zones, for instance, or minor changes to a proposal that will optimise business and tax outcomes.

“Tax should be seen as an enabler, not a blocker to innovation,” says Lee. “We look at things in a different way to come up with novel solutions. But we can’t do that effectively if we don’t get out of our seats and meet the people with responsibilities at the business end.”

Though Dave believes that tax professionals gravitate naturally towards technical and tough challenges, he believes better training in softer interpersonal skills could elevate the tax function and its influence. It will help to breakdown silos, put other functions at ease and build towards true business partnering. Dave explains: “Business partnering is about listening and communicating with stakeholders and translating our complicated tax world into their kind of language so that it resonates with them.”

“Business partnering is about listening and communicating with stakeholders and translating our complicated tax world into their kind of language so that it resonates with them.”
Dave Pickering, Tax Director
Molson Coors Beverage Company

Key takeaway: Drill down into the tax cost base and identify where the tax team can add value. Think about the impact of every change and every expenditure from a tax perspective. Build your tax team’s interpersonal skills to support their engagement with the business.

Let tax do the talking on IT transformation

In many businesses, major technology and IT transformation programmes are underway. Far from making tax professionals redundant – especially those in compliance roles – technology frees them up to focus on what the data tells them. In turn, this deeper data analysis allows for the identification of risks, opportunities and ways to add value to the business.

But don’t let technology be foisted upon you. A new IT system that replicates an older version is a missed opportunity to do something better. “As tax professionals, we should both raise our pain points – what works, what doesn’t and what will make it better – and understand how new tech can deliver improved outcomes,” says Dave. Moreover, the people who use the tech should be the people to test the tech. Only they can ensure that it does what they need it to do and deliver strong governance.

Key takeaway: Know what you want from new technology. Be led by the problems you face to find the solutions to help you do your job better and more compliantly.

For any organisation, tax can be one of the most significant costs. So, it figures, there must be opportunities for the tax team to interrogate that total tax cost and bring value back to the business. That might mean:

• Looking at processes to ensure that they are as efficient as they can be and that resources are proportionately focused in areas of greatest tax risk.

• Redistributing responsibilities between the tax team, the finance function, shared services and external advisers.

• More outsourcing to free up capacity or, conversely, bringing functions like compliance in-house to reduce costs.

• Going through the cost base and asking whether all available incentives and reliefs are being claimed and maximised.

• Tax payment deferrals.

“Draw up a big list and go after your top three opportunities,” explains Dave. “And once you’ve tackled them, go after your next three. If you do that, I guarantee you’ll bring value to the organisation and show your tax team in its best possible light. We need to celebrate what tax does and demonstrate that we really are in this together with our business colleagues.”

More than that, tax needs to be in the room whenever and wherever the business plans to spend money or make changes to its business model. If the operations team is looking at near-sourcing to save costs in the supply chain, the tax team can check for adverse tax consequences. Equally, tax can put forward alternative approaches: operating out of green zones, for instance, or minor changes to a proposal that will optimise business and tax outcomes.

Transparency begins with an efficient process to collect and verify data. It must be reconciled with other disclosures made by the business in the geographies in which it operates to deliver one consistent version of the truth. But, before sharing more information, test what other people think you mean in your statements. What makes perfect sense to a tax professional may be misconstrued by a customer, an employee or even an activist.

Key takeaway: Get tax in the room early to ensure that your ESG reporting data is robust and reliable. Be clear in what you say with your “tax hat” on so that disclosures are not misunderstood.

How do you align your tax priorities with the overall business strategy? How do you raise the profile of tax within the organisation?

For Dave, it starts with really understanding the organisation’s priorities and corporate goals, which means engaging with people in the business. Get beyond the initial statements to understand the details beneath. And then think carefully about what those priorities mean for tax. “By aligning tax priorities with those of the organisation, tax will be seen as a facilitator,” he says. “If you want to raise the profile of tax, and be seen to add value, then you’ve got to be on the same train as the business leaders.”

“If you want to raise the profile of tax, and be seen to add value, then you’ve got to be on the same train as the business leaders.”
Dave Pickering, Tax Director
Molson Coors Beverage Company

And be curious. Understand what makes the organisation tick so that when the tax team meets with other business units it brings much more than tax to the table. It brings a level of understanding and a shared ambition to achieve the goals that the organisation sets itself in the best way it knows. “Immerse yourself in the organisation,” advises Dave. “Don’t stop at ‘I just do tax’.”

For Lee, it’s all about business partnering. Getting out into the business; visiting stores and facilities; getting to know people and what they do. “Have coffee with internal people to understand their challenges and ambitions and to anticipate what might be coming down the line. Meet with your peers to collaborate, exchange ideas and benchmark your performance. You can’t be an effective head of tax unless you do all of this well.”