2 minute read 28 Feb 2020
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5 pillars of an intelligent tax function

By EY Global

Multidisciplinary professional services organization

Contributors
2 minute read 28 Feb 2020
Related topics Tax Tax function operations

To keep pace with tax authorities, companies need new ways of obtaining, processing and using tax data.

This article is part of our 2020 Tax Technology and Transformation Survey.

As the pace of regulatory change accelerates and tax authorities strengthen their data analytics capabilities, companies must strive to build new tax operating models quickly — within the next few years. For many, this will involve a new way of obtaining, processing and using data, bolstered by a new mix of talent, training and technology — all working together to create sustainable, long-term value.

We call this new model the intelligent tax function. It will be tightly integrated operationally with the rest of the business, and will leverage data, technology and personnel efficiently. The intelligent tax function is very different than the ones we know today. Artificial intelligence will increase the opportunities for applying human intelligence. Tax professionals will be able to analyze data more deeply than ever, adding another skill to their tax resumes.

The data aptitude gap that exists in today’s tax function will close rapidly over the next five years as companies hire more technologists and data scientists, and supplement tax technical training with training around data management and analysis.

This combination of higher data quality, automation, new skill sets and realigned responsibilities will help tax functions achieve the aspirational yet elusive goal of focusing on the highest-value activities.

Tax will increasingly assume a strategic role and be recognized for adding value to the organization.

A blueprint for action

To build an intelligent tax function, focus on five key pillars:

  1. Enterprise systems: Leverage the system of original entry – the enterprise resource planning (ERP) system – and other data repositories; participate in their governance and processes.

  2. Talent: Begin to upskill personnel in critical technology areas including database concepts, desktop data management and analytic tools.

  3. Tax technology: Continue to evolve your internal tax technology function from its roots to become more engaged and accountable for tax data tools and relevant IT governance.

  4. Data control: Key challenges across the tax data life cycle include ERP proliferation, data fragmentation and inadequate use of finance or tax data warehouses/lakes. Champion investments here to drive improvements in your overall tax operating mode.

  5. Transformation mindset: Establish a seat at the enterprise transformation table and make sure your tax function needs are adequately addressed.

Getting started

To begin your journey toward an intelligent tax function, start by asking these questions:

  • What are your tax function’s goals?
  • What are your reporting requirements?
  • Do you have a clear view of your end-to-end tax data supply chain?
  • Is your tax technology up-to-date?
  • Are you acquiring tax data correctly at the source?
  • Is your organization committed to transformation?

Change can be unsettling, but this is an exciting time to be a tax professional. In the years ahead, tax will increasingly assume a strategic role and be recognized for adding value to the organization.

Summary

Building an intelligent tax function takes the right mix of technology and talent. Enterprise systems and tools must focus on close data control to avoid the ripple effects of data fragmentation. Staff should be upskilled in critical technology areas around data, but above all they must embrace a transformation mindset.

About this article

By EY Global

Multidisciplinary professional services organization

Contributors
Related topics Tax Tax function operations