According to tax experts, there is a huge shift taking place in the field of tax as it transforms from a mostly accounting and finance business to a hybrid industry requiring significant IT capabilities.
In order to handle the rising worldwide compliance burden, tax directors believe there is a pressing need for people to have hybrid capabilities, covering IT as well as accounting and finance.
International tax authorities have increased their demands for automation and real-time invoicing, which has affected taxpayers. Many organizations have adopted additional technological solutions as a result of the rise in live reporting in order to deal with the increased compliance requirements and the amount of tax data generated.
Businesses want a new breed of tax expert that is proficient in accounting, finance, and IT, according to Sabine Studer, head of group tax at the metal processing company Bystronic in Zürich.
According to Studer, "the tax professional is now being asked to take on more of a hybrid role between the accounting and finance position, and the more technical IT side of things."
Employees, according to her, must be able to efficiently deal with the sophisticated technology used by businesses and serve as a link between IT and the tax division.
To make sure that any system improvements meet the organization's general compliance criteria, staff must have the necessary commercial experience.
The quantity of precise transaction-level data demanded by tax authorities has compelled tax administrators to automate their procedures, according to Vikas Garg, director and head of indirect tax at Siemens India in Mumbai.
According to Garg, frequent changes in the regulatory environment have forced tax professionals to think outside of the box and effectively address contemporary skill shortages.
wond"Who would have thought that a tax manager would be an expert in technological tools such as Alteryx, Power BI, Qlik Sense, Vertex?" wonders Garg.
He claims that the use of such sophisticated tax tools by in-house tax teams is no longer unusual in today's world. They also guarantee the accuracy of the information given and lower the risks of human error, which are frequently produced with manual inputs.
But some people have paid a price for the development of tax technology, while others have been left behind.
In tax departments, a gap appears to be emerging between regular tasks that are highly automated and specialized roles that demand ever-increasing IT expertise.
According to Studer, international corporations have been especially skilled at reacting to this change in working dynamics.
This has been accomplished by allocating tax-related duties in accordance with business priorities while ensuring that businesses continue to comply with tax laws.
In accordance with the needed type of tax or reporting technique, "they [multinationals] know they have to fulfil technology and information [data] requirements," claims Studer.
Specific tax compliance responsibilities, reporting procedures, and technological solutions can help businesses standardize their tax functions.
Similar trends can be seen in the transition from complex tax roles to everyday employment. A complex specialist task is first standardized through the use of technology. As a result of this standardization, the role eventually becomes one of a junior position and ultimately a routine activity.
"Once it's [the changes] implemented, they [companies] can automatically go on to [employ] a more junior resource because now it's all standardised," claims Studer.
The fierce battle to hire greater value-generating staff appears to be widening the gap between employees.
The difficulties that businesses experience in filling important tax posts with qualified candidates have been underlined by David Peeters, senior director of worldwide indirect tax at US energy company World Fuel Services.
The industry appears to be lacking in technology know-how and tax data.
Peeters continues, "It’s driven by economic principles with a lot of demand, but limited supply."
Technology has benefited the tax industry, but it has also presented certain difficulties. Among them is a stronger focus on analytical abilities to evaluate data and rules.
"Analytical skills are more in demand whereas access to information has become a lot easier," claims Studer.
Despite having knowledge at their fingertips, tax professionals still require the capacity to access the various tax systems.
Accessing databases, ERP systems, consolidation tools, BI tools, and tax engines—tax compliance software—are a few of them.
The role of tax professionals has changed, says Madelein van Zyl, partner in tax technology, transformation, and innovation at KPMG in Johannesburg, and now necessitates a larger skill set that puts them in a more prominent position within their companies.
According to van Zyl, tax professionals must "become more highly integrated in organisations with broader areas of responsibility" in order to "become greater strategic partners of businesses" as opposed to the mostly back-office roles they previously held.
These call for a shift away from a purely technical interpretation of tax regulations and toward more value-generating insights, such as the application of advanced analytics and artificial intelligence to address deficiencies in corporate processes.
The field of tax has developed into a multidisciplinary one that calls for professionals with a wide range of expertise. According to Studer, "tax is no longer a singular profession that just requires tax skills."
According to her, the new breed of professionals must be sufficiently IT-skilled to comprehend intricate technology advancements while ensuring that they stay in compliance with tax regulations.
Accounting and finance are increasingly combining, and IT is becoming a key component.
"You need to understand how businesspeople speak, how this translates into what's feasible in the ERP system and if that outcome those matches with tax regulations," according to Studer.
This viewpoint is supported by Garg, who claims that success in the sector now requires more than just having solid tax knowledge or the ability to read the law. Top-notch tax technology expertise must be added to it.
This can expedite the delivery of pertinent [tax] information, support a company's tax standing, and aid senior management in making wise decisions, according to Garg.
Companies will need to utilize more technology as they respond to real-time reporting obligations from tax authorities to ensure compliance.
Additionally, this entails improving the skills of their workforces and streamlining their tax procedures.
Businesses could make stronger efforts, according to Van Zyl, to keep ahead of the digital curve. Automating all aspects of tax compliance is one of them. As a result, there is more transparency between accounting and tax decisions.
Additionally, by employing accounting data to help the tax department with reporting requirements, they might access data sets for better business insights.
Despite concerns regarding the simplicity of integrating these tools with current corporate systems, the use of tax technology has unquestionably been a step forward for organizations.
According to van Zyl, having a future-ready tax function with digitalized tax systems is now necessary rather than optional.
What is certain, though, is that tax professionals no longer have the choice to be knowledgeable in either tax laws or technology. To achieve, they must excel in both areas simultaneously.
By fLEXI tEAM