Tax departments and technology – how do they measure up?Our report explores the different relationships between tax departments and technology and how you can best adapt for the future.
In our 2021 State of the Corporate Tax Department report, we take a look at tax teams keeping up with business-as-usual activity against the backdrop of a global pandemic. Tax reform, specific tax workstreams, acquisitions, and macro changes in politics and the economy are critical challenges for companies surveyed in the US and Canada, the UK and Mainland Europe, and a small number from the rest of the world.
In this year’s report, we also present findings specific to indirect tax teams. Most notably, 57% are anticipating significant government change in terms of digital filing or real-time reporting. Almost all of our respondents expect to face serious challenges around people, processes, and technology to comply with emerging rules.
Corporate tax teams are over-pressured and under-resourced
Half of corporate tax departments feel under-resourced. Tax reform, digitised tax filing, remote work, and new technology and automation projects have made it a challenging year for tax teams with already strained resources.
As we found in last year’s Corporate Tax Departments Survey, tax teams are employing several strategies to address resourcing shortages. Over 30% of respondents plan to recruit qualified tax professionals; however, just as many respondents plan to rely more heavily on the existing team. Only 13% plan to recruit analysts and tech support – a surprising finding when we consider the reported skills gaps among existing teams and new hires. Advanced technology is the single biggest skills gap for tax teams today, with 21% citing it as a top concern.
Tax leaders are adopting a digital-first approach
Despite a significant technology skills gap, new technology and automation is the #1 strategy to address resource gaps in 2021. Respondents from every region see the value in introducing technology to reduce human error and allow existing team members to focus on higher-value tasks. And yet nearly 40% of tax teams lack the time, resources, and necessary skills to effectively deploy technology.
As the landscape of tax changes and becomes ever-more digital, it’s critical that tax departments upskill existing team members or hire specialist tax technologists if the right skills don’t exist. Technology, when it is fully utilised, saves time, reduces risk, and improves overall control and compliance. Teams that rely on manual processes are twice as likely to feel under-resourced and strained by day-to-day responsibilities. By contrast, we saw positive reports from technology-enabled tax teams who felt right-sized to address challenges and achieve their strategic goals.
Download the 2021 State of the Corporate Tax Department report to learn more about the following key topics:
- COVID-19's impact on corporate tax teams and collaboration
- Strategic goals and challenges faced in 2021, such as tax reform and remote work
- Metrics to benchmark effectiveness, efficiency, and talent management
- Trends in resourcing and talent skills gaps
- Successful partnerships with external tax advisors
- Digital filing requirements in indirect tax
- Technology adoption, drivers of success, and the business case for new tax technology
- Personal motivators among tax professionals