We can certainly agree that 2020 has been a roller coaster of a year so far. Every customer we speak with has their foot to the floor, and our own teams are working very hard helping customers get the best from ONESOURCE Indirect Tax.
It’s not often we get to grab a few minutes to catch up over a coffee. But last week the blog team managed to grab some time with Gunjan Tripathi, Senior Proposition Manager for Indirect Tax, to talk about how she got into tax and how the role of the modern indirect tax professional is changing.
So, grab a cup of something hot, maybe even a biscuit, and take a few minutes away from that tax return.
Gunjan, what got you into accountancy and tax particularly as specialism?
When I was studying for my undergraduate economics degree, there were some aspects of the course that I found much more interesting than others. In particular, I found the macroeconomic policy courses very interesting, learning how different fiscal and monetary policy levers can be used to influence not only behaviour, but also the wider impact they leave on an economy’s overall trajectory.
Delving back, it is possible to see how different taxation decisions have influenced the course of history, whether that be the rising wealth of a nation, quality of life and healthcare for citizens, or conversely the weakening of a government.
After university, I found a graduate scheme that allowed me to continue studying accountancy and taxation while working for a wide range of corporate clients. We worked in large open-plan offices where you could hear every conversation – it was a fantastic learning environment where you could soak everything up almost by osmosis. I was no longer just learning from the books; I was beginning to understand how to apply my knowledge in the real world.
You’ve been a tax professional since 2011, working in companies both small and large. Has the job got easier or harder?
When I started working in tax, it was still in many cases the responsibility of a single individual to oversee the work of processing indirect taxes. That person would sit in the accounting team, and it was very much marked out as their domain.
The more you learn about tax, you realise all the areas of the business that it touches. Tax really is almost everyone’s business in a company, whether sales, accountancy, marketing, the boardroom, or employees posting their expenses. Tax information has to be captured right at the source, where it is incurred, and that makes it everybody’s job to help a business get it right.
Today, tax from a processing and management perspective is the job of a team, and of course technology has made life immensely easier in many respects. Platform offerings such as our own ONESOURCE Indirect Tax Compliance and ONESOURCE Indirect Tax Determination solutions are making it easy for dispersed teams across the globe to work together.
Ten years ago, the spreadsheet was still king. Now with digital tax reporting and the evolving requirements of tax authorities around the world for greater accountability and transparency – the last place I would want any tax return I was processing is in a spreadsheet!
What has made tax harder is the breadth and speed of the global tax environment we all need to operate in and stay up to date with.
Other than Making Tax Digital (MTD) for VAT, is tax really changing that quickly for UK indirect tax professionals?
Indirect tax departments large and small are in constant need of accurate data to comply with ever-evolving global tax regulations. What’s changed is the full-throttle speed of these requirements.
Digital tax reporting is a reality that is being driven by tax authorities across the globe. It is allowing them to close the delta on the tax receipts they are losing – an incredible €140.04bn across the EU in 2018, and forecasted to increase to €164bn by end of 2020. The trend towards digitalisation of tax compliance utilising vast amounts of underlying data is already happening in many countries.
SAF-T has been rolled out in Austria, France, Lithuania, Luxembourg, Norway, Poland, and Portugal; and programmes are underway in Romania and Hungary. The GCC countries too are rapidly rolling out VAT regimes as well as India’s Goods and Services Tax (GST), which are sure to leverage technology.
For UK indirect tax professionals, MTD for VAT is just the start for HMRC’s digital tax reporting aspirations. But regardless of HMRC, every UK tax professional needs to be thinking about the acceleration toward digital tax reporting and about each jurisdiction they operate in. It is one of the reasons we tell clients to think carefully about choosing a software solution that is going to meet their global tax and accounting requirements long into the future. There is a window to get ahead of the game – and as tax professionals, we need to make the most of it.
How do you see the indirect tax professional’s role changing in business?
The role of indirect tax professionals is now more strategic than ever before, and in my view this will only continue. Digital tax reporting will not only improve the processes and accuracy of indirect tax teams, but also give those teams access to a raft of information and insights that can be used to inform decision making.
Access to that granular tax data means an organisation can respond quickly, but it’s not just about what is happening in your business. You need to be able to respond to external forces and regulatory change as it happens around the world. Sure, there will be cases where those changes are synchronised to happen together, but largely every tax authority moves at its own pace. In 2020, we have seen just how quickly they can respond, and indeed change their response, as every country works its way through the global pandemic.
Forward-thinking indirect tax departments will be able to use tax data analytics tools to create a holistic global tax story for their organisations that will facilitate compliance and strategy – elevating their roles accordingly.
You mention analytics there – so do you think that has become more important for indirect tax professionals?
Data analytics goes beyond systems, departments, and organisational divisions to serve the business in its entirety. Systematically applying data and analytics across all areas of a business — from supply chain to tax compliance — will eventually enable businesses to allocate precious investment funds more quickly and with a lot more confidence.
Just looking at tax, there is much more financial and transactional information available than ever before, and with well-implemented systems that join all the dots, it is possible to have unprecedented access to a near real-time, single version of truth in your tax and financial systems. Today, very few organisations have access to clean, complete, and detailed tax data on-demand for all of their global entities. That is a problem that every business needs to overcome, but the payback is tremendous.
It might only sound theoretically plausible – but it is very achievable. Software is making it easier than ever before to join up data sources. Using technologies such as artificial intelligence and machine learning, systems can rapidly find patterns in data that would take even the most impressive data scientist months, if not longer, to find.
These developments make it possible for indirect tax professionals to focus on what patterns mean, model scenarios, ponder, and make strategic recommendations to the business. Ultimately, you will be able to add value and do so proactively, rather than being bogged down in monotonous tasks and forced to be reactive.
So yes, I would definitely recommend that all indirect tax professionals think about what they can do to upskill themselves and their teams in terms of analytics.
You are very much focused on indirect tax and digital tax reporting for large businesses. What advice would you give to any company feeling unease over digital tax reporting?
Digital tax reporting isn’t going to go away – and that’s a good thing for companies. Accept that fact, and you can really start to make a difference. Unease is part of the transformation process. You’re pushing the envelope and aiming higher.
My main advice to any company starting their digital tax reporting transformation is to form a working group from across the company that can build a business-wide case for the benefits of a technology solution and the work required. You need stakeholders at every level, including the board, to be successful. Also, understand the limitations of what you can achieve, and consider how you can phase the project to maximise its return on investment and mitigate compliance risks.
Finally, get the IT team involved early. IT teams love projects where they can demonstrate clearly the value they bring to a business, and digital tax reporting is a perfect example.
Thank you to Thomson Reuters’ Gunjan Tripathi for an engaging discussion on the role of a modern indirect tax professional and the worldwide trend towards digital tax reporting. Download our ebook “Mind the data gap: Automating indirect tax processes” to learn more.