The C-suite can no longer afford for their tax functions to be consumed by routine compliance and reporting activities, said Deloitte recently when releasing results of its Tax Transformation Trends survey which collected responses from more than 300 tax and finance executives globally.
“To truly deliver value to the business, the tax fuction needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs,” said Phil Mills, Deloitte Global Tax & Legal Leader. “The good news is that tax and business leaders have more options at their disposal to achieve this”.
Urgency to transform resourcing models is greater than ever. 93% of tax leaders say their budget is remaining flat or falling, while business partnering demands between tax and finance leaders and their business counterparts are on the rise.
The strategic value of tax must be realized faster as companies accelerate business model transformation. 65% of tax leaders say the shift to digital business models is a key area where the business needs its guidance.
The race is on to get ahead of fast-evolving digital administration trends in tax authorities. 92% of survey respondents say transformative changes to the way companies are being required (electronic filing, real-time reporting, etc.) to provide tax information to revenue authorities is also creating an imperative to modernise at a faster pace.
These tax and finance leaders say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years- and leaders say the trend is moving faster than expected.
Tax leaders are prioritising data simplification and lower-cost resourcing as a foundation for the future vision. Simplifying data management (53%) and moving to lower-cost resourcing models (51%) are the priority strategies as tax redefines its role.
CFOs are beating the outsourcing drum the loudest. 44% of C-level respondents (two-thirds were CFOs) think outsourcing is the most important strategy for lower-cost resourcing models, ahead of automation (39%) or shared service centers (31%). The survey shows a gap between the strategies the C-suite see as most important and those Tax leaders who favor shifting work to other parts of the business, see as most important.
Those already on their transformation journey are already seen to be adding strategic value. Where tax teams have introduced next generation enterprise resource planning (ERP) systems, 56% are seen as highly effective at supporting the business with scenario-modelling insights, compared to 35% of others.