Tax departments must take a strategic approach to their technology investments, which would allow them to better leverage their technology and develop the skills required to get the full benefits from it.
FREMONT, CA: In the past few years, the digital wave has become stronger, and the business case for the implementation of new technologies in the tax function has gained momentum. Digital tax administration has evolved as one of the biggest drivers of tax function transformation. Digital technologies are radically changing business and operating models, resulting in value creation for businesses. Tax authorities around the world are introducing newer tax laws to deal with these digital models. Tax functions, therefore, require to be ready to deal with the digital disruption wave, which needs them to be closer to their stakeholders and data and address the changing demands and expectations of businesses and tax administrations with improved accuracy and efficiency.
The tax technology landscape is fast maturing and is now shared by several solution providers and products. For most tax functions, the complexity today is deciding their requirements, tax technology strategy, and resources to run the strategy rather than the availability of platforms. With the advent of cloud-based offerings, the cost of implementation and maintenance of large applications has come down dramatically, the cost of compliance is becoming steeper, transparency and data sharing with tax authorities is becoming significant, and tax authorities are asking informed questions.
Tax technologies make it possible to remediate the mandates of the global digital economy with changing tax data flows, data analytics, and data demands. The latest digital tax function might evolve at an increased pace to become a strategic component of enterprise transformation. Tax authorities are becoming digital and getting closer to the source data to better understand taxpayer trends and make sure better compliance. Therefore, tax functions cannot continue to remain blindfolded because of the lack of access to and visibility on their source data and potential to assess trends accessible to tax authorities. Hence, there is a demand for the tax functions to undertake timely and accurate compliance and go digital to undertake more value-adding functions for the business.