Our survey of 100 of the largest multinational companies finds that tax functions are investing heavily to close a data and technology gap.
Our 2020 Global Tax Technology and Transformation Survey assessed a tax landscape being disrupted by multiple megatrends. The pace of regulatory change, the digitalization of tax authorities, far-reaching technology advances and more are all redefining how tax functions must operate.
Among the varied perspectives we gain, there was one overarching conclusion: tax functions must close the data and technology gap as quickly as possible. The tax function of tomorrow must master data intelligence to become an intelligent tax function.
Tax authorities are disrupting the tax function
Tax authorities are driving technology changes that are increasingly impacting corporate taxpayers. These changes require companies to provide more information and perform more real-time digital filing. Firms also must increasingly use data analytics for risk profiling and auditing.
Tax functions dealing with these digital tax administrations (DTAs) are feeling the effects and taking action.
- Nearly all of the companies in our survey (98%) are organizing their response to digital tax administrations (DTAs) in a centralized and globally consistent manner.
- Companies dealing with DTAs are increasing their related technology outlays by 40% or more to deal with the new reality, despite overall budget constraints.
- Companies with global headquarters in countries with DTAs are 31% less confident in their monitoring of related requirements.
Focus on data sources and transaction-level information
Spreadsheets are often the symptom of multiple data sources and systems not being set up correctly for tax. Although the tax function cannot control the number of enterprise resource planning (ERP) systems, it can influence their design and governance. With tax becoming more real-time and transaction-based, tax functions should actively participate in the design and governance of financial systems to help achieve data quality via correct processing at the time of transaction.
- 93% of companies surveyed deal with multiple ERP systems.
- Companies with six or more ERPs spend at least six times more time on data collection, cleansing and manipulation.