In the simplest terms, tax processes are generally managed as a component of corporate functions and in-house tax functions, performed by a mix of people, utilizing software that’s either internally built or externally licensed, and utilizing external providers to some extent, such as business processing outsourcing companies or providers of professional tax services such as EY.
Regardless of the location or agency of those processes, we know that currently there is still a lot of manual effort involved: a survey of 175 CFOs, Tax Directors and Tax Managers suggests that of the top 200 in-house tax functions in Australia and New Zealand, 47% were spending at least 35%–50% of tax function resource time on manually moving and transforming data from one application to another.
The survey also revealed that 27% are spending at least 50%–65% tax function resource time on this type of manual task. Tax-oriented software has not managed to limit that.
There is lots of talk about tax being ripe for process automation, and that’s partly right. Automation and analytics software creates a real opportunity to evolve tax functions and tax processes. But what tends to be underestimated is the complexity of the task.
For example, our member firms operate in more than 150 countries, each of which has many tax regulations within different regions or states. Add to that the fact that many tax processes are being performed on bespoke client data sets with complex qualitative decision making required, and there is a major multiplier effect — it’s very far from being wholly standardized. Many of the same challenges exist for individual corporate tax functions.