Meeting tomorrow’s tax challenges today

22 January 2016

 

Never before has tax been more important to governments, taxpayers and other stakeholders. Increased global compliance requirements, together with a greater need for robust controls to manage tax risks and a desire to use data analytics to assist in business wide decision making processes are all impacting tax functions and their investment decisions.

To remain relevant to the business, finance functions will need to manage these growing external pressures and operational challenges by charting a course for continuous transformation on tax that is immediate, holistic and practical.

The Tax Function of the Future will look fundamentally different from today’s. Companies that find ways to bridge the gap between this future state and their current capabilities will be the ones to succeed. The gaps that should be focussed on include:

  • Doing more with less; balancing increased complexity with the need for real time analysis
  • Reaching the tipping point for automating data collection and analysis
  • Managing the shift in the global tax landscape, to provide transparent information on the tax attributes of the organisation to tax authorities, the public and other stakeholders
  • Having clarity on the operation of the tax control framework and its effective management of tax risk to give confidence when talking about tax to stakeholders
  • Effective business partnering to navigate the complexity of business models and manage the tax implications real time

The finance function won’t be able to solve these challenges with a one-dimensional approach. I have seen finance functions look at how they serve the business and redefine excellence (as can be seen in PwC’s annual benchmarking report). In addition, it will be necessary to consider the tax strategy and roadmap for change in a cross-functional manner, involving governance, data, technology, processes and people. It will be critical to capitalise on change such as merges, acquisitions, expansion or transformation to meet tomorrow’s tax challenges today.

Our Tax Function of the Future series explores in more detail our global predictions for the tax function within finance, the challenges arising and how these need to be tackled by companies in the next three to five years.

Businesses who invest now for the future can expect to see significant payback over the years to come. Beyond measurable cost savings, it will improve other areas such as enterprise-wide risk management, tax governance, resource management and recruitment processes. If not, the tax function will miss the opportunity to become a strategic business asset and remain viewed as just a compliance centre function.

Visit: Tax Function of the Future

Visit: Finance Effectiveness Benchmark Report

  Giovanni Bracco

Giovanni Bracco | Partner, Tax
Profile | Email | +44 (0) 191 269 4117

 

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