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The Future Tax Function

The growth in demand for corporate tax technologists, taxologists, or even taxnologists, has long been predicted. But mounting evidence from the education and recruitment sectors suggests that the future career path for tax professionals is already here.

Multiple drivers are accelerating a transformation of tax teams’ roles and responsibilities, paving the way for innovative technology that reduces manual processes and boosts analytical capabilities. This is particularly relevant in tax-related fields, like reporting (provision) and transfer pricing. One large driver is the increasing complexity of tax environments, especially for international organizations with globalized supply chains. A second is the growing environment of public scrutiny surrounding companies that are perceived to be dodging their tax responsibilities.

Other factors include the strategic need to integrate tax forecasts for different scenarios within financial plans. Pressure to reduce staffing costs, and the subsequent need for professionals to do more with less, is a further catalyst for change.

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As PwC notes in its ‘Spotlight on How Tax is Leveraging AI’ report’, part of its Tax Function of the Future series: “Internal and environmental challenges require Tax to be nimble and accurate in providing information the enterprise needs for business decisions as well as complying with increasingly complex rules and calculations for tax jurisdiction reporting. Tax needs to consider innovative ways to collect and process financial data, moving away from manual manipulation and reconciliation to more forward-thinking analytics for real-time decision-making.”

Technologies, such as corporate tax management software, data analytics, AI, and machine learning, will have significant impacts on the tax team’s work processes moving forward, supporting more efficient and data-driven decision making. This means more organizations are looking for tax professionals with a blend of tax and technology expertise, and as such, are already investing in the tools and technologies that will enable them to attract the best future talent in these areas.

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Education shows the way forward

Unfortunately, many companies have not yet looked internally at modernizing the processes and technologies used by their tax teams. The danger is that they will miss out on the increasing numbers of technically skilled candidates coming out of the cutting-edge tax technology programs and/or public practice. This is a missed opportunity, because these individuals come equipped with advanced capabilities in technology that can support tax teams, including such areas as data analytics and data visualization. Such candidates are more likely to gravitate towards organizations that can provide opportunities to work with the technologies that will continue to help advance their careers.

It’s worth noting that more and more educational institutions are waking up to the need for new and different curricula. These are designed to generate the skills and understanding tax departments need to maximize organizations’ profitability with defensible strategies that stand up to tax authority and public scrutiny.

Nyenrode Business Universiteit in the Netherlands, for example, has introduced an executive program called Tax Data Science. The university explains that: “International projects like the OECD’s BEPS (Bare Erosion and Profit Shifting), AEoI (Automatic Exchange of Information) and CRS (Common Reporting Standards) are resulting in a new data-driven landscape for tax professionals worldwide.”

The program, which attracts international students, is designed to: “develop a next generation of tax thought leaders and to strengthen their competencies in the field of data science and technology.”

It teaches students to: “work with the rigor of a data scientist; design solutions to questions that do not have an answer yet; work in international teams across jurisdictions; and deal with the effects and (unintended) side-effects of digitization of tax”.

A second program, run by the Poole College of Management at North Carolina State University, leads to a Tax Analytics and Technology Certificate. The program helps students: “develop competence in the area of information technology as it is used in extracting, manipulating, analyzing and summarizing tax data”.

The program offers 12 modules, including Forecasting Effective Tax Rates and Scenario Analysis, Visual Analytics in Tax, Database Management in Tax and Data Security and Warehousing in Tax.

Tax and Technology, a program designed to “prepare the future generation of tax lawyers for the legal technology era by bridging the gap between tax and technology” is delivered by Vrije Universiteit, Tilburg University and Maastricht University.

As well as teaching about leading edge technologies such as AI and robotics, the course delves into the implications of dirty data, data quality and analytics, and standards for data reporting.

Universities are not the only ones leading the charge to create the new tax technology skills needed by businesses, though. Large advisory firms also offer courses to deliver digital competencies so they can continue offering relevant tax and technology advice.

EY runs a Tax Technology and Transformation Graduate Programme, for example. It says: “Tax is undergoing a fundamental and long term period of transformation as Tax Authorities globally seek to digitise existing tax regimes as well as introduce new, large scale, complex and data intensive tax regimes to fight tax evasion and increase tax revenues. This is driving a significant market demand for technology, data, AI, operations/PM professionals to help our FS clients to adapt to the rapidly evolving tax landscape both accurately and cost effectively.”

Organizations should be well aware of this shift in tax curricula, because the professionals of tomorrow will increasingly rely on—and expect to have—the latest tools available to do their jobs. Failing to meet these expectations can lead to a crippling inability to compete with other organizations in hiring the best talent, or else disgruntled employees who feel they cannot perform as well as they could if they had the right tools as their disposal.

Recruiters specify tech skills for tax roles

Education is not the only field sharing a glimpse into the future norms of corporate tax functions. An analysis of the open job positions advertised by recruitment agencies is another clear indicator that shows how demand for tech knowledge alongside tax-specific experience is accelerating, especially in the US. One role for a tax technology senior analyst spells this out in detail, looking for someone to: “Assist in coordination and delivery of continuous improvement initiatives including identifying and developing automation of tax processes through implementation of robotic process automation (RPA).”

Interestingly, the role demands an undergraduate degree in either IT or accounting, specifically citing Management Information Systems, Information Technology, or an Accounting-related field. It also requires at least two years’ related experience, including one or more years of process improvement, process automation, and/or technology experience.

Recruitment agency Robert Walters specifically advises junior tax professionals looking to further their careers to ramp up experience with relevant tax tech. It says: “More and more of the businesses we work with are expecting candidates to have had exposure to technology. Those that have a deep understanding of the robotics behind such systems, plus strong tax technical knowledge, are in a fantastic position.”

Meanwhile, specialist recruiter CBO Search focuses on filling tax and tax technology roles. It looks for candidates from both tax and technology disciplines, including those with data analytics and software engineering skills.

In an interview for the CBO Search blog, tax technology expert Pierre Arman confirms that it is this mixture of tax and tech that is particularly valuable. He says: “You do not need to be an ERP expert [nor] a Chartered Tax Advisor to succeed. The key is to know enough in both IT and Tax to be credible and leverage that knowledge to think outside the box to solve challenges.”

How organizations can embrace the future

All of the indicators from education, recruitment and advisory firms show that many business (and tax team) leaders will be thinking ahead now to prepare for the future, looking to upskill or recruit the right people for a digitized tax function. To ensure their businesses keep up, seasoned tax professionals already in the workforce should look to bring these capabilities into their organizations by adapting their people, processes, and technology.

Their challenges include a growing shortage of tax technologists and cultural resistance to change. However, implementation of the right software from the right vendor can immediately address these gaps while simultaneously training current employees on best practices – and bringing significant value to the business.

All of this presents a great opportunity for existing tax professionals who want to move their careers forward, not just university students and recent grads looking to land their first gigs. But taking full advantage of this shift towards technology requires a true paradigm shift. The accelerating speed of business means that professionals will need to embrace a mentality of lifelong learning, which will involve keeping up with the best tools, learning how to apply them to business problems, and identifying additional areas in need of innovation, all while keeping a finger on the pulse of shifting tax regimes and regulation. It’s no easy feat, but at least now there’s an app for that.

Longview Tax and Longview Transfer Pricing are two products within insightsoftware’s Longview suite that automate many of the manual tasks associated with ongoing operational activities. Reducing the burdens of manual consolidation, reporting, and ongoing tracking allow tax and transfer pricing professionals to focus more of their time on valuable analytical activities, thereby elevating their stature as strategic business partners within the organization.