In this video, Amar Thakrar, Partner, Tax Compliance & Transformation, and Stuart Tait, Partner, Chief Technology Officer, Tax & Legal, explore the two key super trends that are driving what the tax function will look like in ten years’ time.
What should you be thinking about now as a tax leader? You need to consider how to give your people the skills to thrive in that technology enabled future – from understanding generative AI and its implications on the profession to building their data skills to thrive in a world of real-time tax.
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The future of tax is incredibly exciting. We're at a point where we're akin to moving from the typewriter to the word processor in terms of the efficiencies that we're going to unlock.
There's two key super trends that are really driving what the tax function will look like in 10 years. The first is how tax authorities are embracing technology.
The second key trend is that the speed of technology deployment has increased massively, and tax functions are using technology in ways they haven't before.
Digitisation of the tax authorities is changing almost everything about what it means to be a tax professional.
Tax compliance is moving upstream, closer to the business event, driven by data having to be reported much more real time to the authorities.
Really what's going to happen is those people who focus on tax compliance today are going to have slightly different roles.
They won't be going into the system, extracting data, manipulating it, reviewing it and sending data to tax authorities. They'll be working with the creators of data in the business.
They'll be upstream in the ERP systems, making sure that data is right, it's controlled and its ready real time.
As the tax authorities start to use generative AI tools to close the gap between the tax legislation and the taxpayer, we'll see a reduction in more routine dispute activity between tax authorities and taxpayers.
What we'll probably therefore see is much more targeted, much more technical disputes.
It's causing a lot of challenge for tax functions to think about where the tax authorities are going to place their bets next? Where do tax functions need to keep up?
Will all tax authorities even do the same thing? I think what we've seen before is all tax authorities take a slightly different approach depending on the problem they have.
And I think tax functions really have to grapple with the variety of demands from a technology adoption perspective that tax authorities put on them.
Advancements in technology, on the other hand, are changing the advisory side of the tax profession.
When you can do research in seconds rather than in weeks through use of generative AI tools, it's really going to change the nature of what it means to be a tax advisor.
There are two broad trends that we're seeing around technology today in tax functions. I think the first is the ability to put technology into the hands of end users.
For a long time, technology was a deep technical skill in its own right, and understanding it was quite a black box mystery. Now, most tax professionals have access to great technology.
I'd say the other key trend is, of course, the impact of artificial intelligence. Gen AI is here to stay now, and that's really driving productivity about how much tax professionals can do.
And again, they can use that very easily day to day without really deep technical training.
In 10 years’ time, I actually think the technology landscape of the average tax function is going to start to simplify.
As more tax moves into the source accounting systems and into real or near real time effect, then we'll see a simplification of the landscape where you have numerous tax technologies bolting onto your ERP system and much more focus on tax being affected in the ERP system itself.
It's not uncommon for tax professionals to feel a little bit hesitant around what all this technology means, how it's going to impact their careers and what they need to think about. And admittedly, there is a lot to think about.
But ultimately, the role as tax professionals to partner with the business, to drive value, to be really experts in their domain, that will never go away.
And that's only more relevant with the adoption of technology.
The most important things to consider as a tax professional when you're looking at the future of tax is if we're looking at a world where compliance is undertaken in the ERP system and it's primarily around programming tax legislation, where advisory is enabled by AI allowing you to do research really quickly and therefore requires deep subject matter expertise, which of these camps will you fall into?
And if you're not in one today, how do you start moving your career in that direction?
In terms of what tax professionals should be doing next, I'd say just get your hands around the technology. There's so much out there, really embrace it, really go for it, because I think you'll see a massive difference.
Tax leaders should be thinking about how they give their people the skills to thrive in that technology-enabled future. How are your people going to understand generative AI and its implications on the profession?
How are they building their data skills? How are they understanding how to thrive in a world of real-time tax?
