Press release

23 Jun 2020 Nicosia, CY

ΕΥ: The unprecedented digital and legislative change drives tax and finance functions to transform critical activities

ΕΥ: The unprecedented digital and legislative change drives tax and finance functions to transform critical activities

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EY Cyprus

Multidisciplinary professional services organization

  • 85% of companies anticipate an increased workload from emerging digital tax filing requirements
  • 73% are more likely than not to co-source tax and finance activities in the next 24 months
  • 45% have trouble providing new responsibilities and career advancement

Nearly seven in ten (65%) companies say they lack a sustainable data and technology plan to implement their tax and finance function’s purpose and vision. Companies also face a challenging environment characterized by unprecedented legislative and regulatory change, significant talent challenges and the need to do more with less, only magnified by the impact of COVID-19. This is according to a new EY Tax and Finance Operate report that surveyed 1,013 organizations globally.

In response to these challenges, nearly all organizations (99%) said they are acting to transform their tax and finance operating models and 73% of organizations said they are more- likely-than-not to co-source critical activities in the next 24 months to relieve these growing pressures.

Unprecedented pace of change and cost pressures

The pace of legislative and regulatory change is overwhelming tax and finance functions, with 85% of survey respondents anticipating an increase in their workload to comply with emerging digital tax filing requirements.

In response to US and other major tax reform, 83% of large companies – those with revenues of $20B or more – say they received additional budget to implement the changes. Over two-fifths of all companies (44%) estimate a spend of at least US$10 million over the next five years to comply.

All the while, tax and finance functions are having to do more with less, with nearly eight in ten (79%) of respondents planning to reduce the costs of their tax and finance function over the next two years.

Data and technology transformation deficits

Adding to the growing regulatory demands on tax and finance functions are a deficit in technological capabilities, with only 3% of tax function’s surveyed making extensive use of disruptive technologies such as AI and machine learning. Fifteen percent of organizations are not using them at all. Those that aren’t investing in data and technology as part of a transformation strategy are potentially limiting effective delivery of their tax function’s purpose and vision in the long-term.

Changing talent needs

Another challenge lies in both recruitment and retention of talent, with 45% struggling to provide new responsibilities and career advancement opportunities for their tax and finance personnel. In addition, 62% of tax and finance functions spend the majority of their time on routine compliance activities – as opposed to higher valued-added activities.

Also, a clear majority of respondents (83%) believe the core technical competencies of their tax and finance personnel must be augmented to include more data, process and technology skills over the next three years.

EY response

EY Tax and Finance Operate is a technology-driven delivery model that pairs highly skilled resources with best in-class processes to help companies achieve their strategic vision. Building proprietary capabilities can be challenging and costly and many organizations find it cheaper and more effective to co-source select activities, leveraging the significant investment that EY has made in people, process and technology.

Commenting on the Survey’s findings, Philippos Raptopoulos, Partner and Head of Tax and Legal Services of EY Cyprus, said: “As regulations and laws change at an unprecedented velocity, businesses are faced with a choice between building out their own capabilities or working with a third-party provider. In either case, tax professionals, more than ever before, will need to have world-class tax technical knowledge, a deep understanding of data, and proficiency in tools such as artificial intelligence, automation, machine learning and data analytics.”

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EY Tax and Finance Operate report (in Greek)

For more information, please contact the EY Cyprus

Email: Irene Charitou

Contact number: +357 22209999

Notes to Editors

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