What we have learnt: no regret actions for tax functions

I don’t think anyone expected that 2020 would look like this. But as we move into Q3 tax functions must start to adjust to the current economic landscape. Priorities and challenges will have shifted, so now is the time to take a step back and reflect on the lessons of the previous quarter.

At the start of the year tax functions were being pushed to their limits by juggling new global tax requirements and legislation with maintaining business as usual compliance. A few months later, global lockdowns turned the heat up further. Additional demands came fast and needed rapid answers, such as forecasting, tax analysis of business decisions, cash generation, new risk areas and, of course, remote working. This unforeseen mix of challenges has highlighted some interesting and recurring themes.

From my conversations with clients and colleagues, I’ve heard how remote working has shone a light on the lack of documentation around processes and workflow. Similarly, in some cases, controls and governance processes have struggled to adapt to the new virtual environment, highlighting the inefficiencies of repetitive, manual tasks when resources are stretched. Against the backdrop of tax teams struggling to adapt to this change in the working environment came further challenges; authorities are expecting tighter tax risk management while budgets for investment in resources, skills and maybe even technology are being pared back. While many things are uncertain, one thing is clear; tax teams are having to do more with less.

As my colleagues noted at the World Economic Forum, organisations need to come up with strategies that meet both short term and long term needs. So, reflecting on these turbulent first six months, we offer a variety of “no regret” and low cost actions for the tax function. We believe these will help tax teams adapt and become more operationally resilient as we head into the second half of this unpredictable year.

I anticipate the emerging trend for creative solutions to problems will continue, as tax functions review and update their processes, controls, resourcing models and cost management to operate effectively in the new economic environment. And of course, this will be enhanced and extended by a far greater use of technology, which is becoming more accessible and appropriate to a tax function’s needs. Both digital strategy and transformation are accelerating as part of the return to work strategy and tax has a key part to play in this as teams are challenged to be flexible and agile to meet whatever new disruption may lie ahead.

Find out more about lessons learned and no regret actions which I have written together with some colleagues from around the world. I hope it helps you in thinking about how your tax function can build on the lessons learned.