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- 2020 Corporate Tax Departments Survey: New Technology Demands New Skills & New Attitudes
In the past two years, the U.S. federal tax system has undergone a seismic change after passage of the Tax Cuts and Jobs Act in 2017, which amended the Internal Revenue Code dramatically. Now with the COVID-19 pandemic, even more changes are emerging at a time when corporate tax departments are having to work remotely, while suffering a surge in workload and resource constraints.
The new report, 2020 Corporate Tax Departments Survey, published by Thomson Reuters / Acritas, examines the landscape in the corporate tax field, surveying corporate tax professionals on the challenges their teams are facing and what they need to address them. The report also provides examples of best practices, together with checklists of actions that corporate tax teams can take now, including creating a compelling business case for investment and re-examining how they can get the most out of their external advisors.
More than 300 respondents took part in the survey in early 2020, with nearly half (49%) holding senior roles on their tax teams.
From that feedback, several key challenges and priorities emerged for corporate tax departments. Those include the day-to-day pressure of compliance with ever-changing tax code, the frustration of dealing with technology that could do so much more if there was sufficient support to make it effective, and dwindling resources to call upon both internally and externally.
Major challenges and priorities of corporate tax departments
The world of corporate tax is entering a new era, in which technology will play an increasingly important role as companies wrestle with the ever-more complex set of rules and regulations from governments all over the world. Technology promises so much: cost savings; efficiency; better, faster data analysis; clearer decision-making; and the ability to streamline repetitive tasks.
So, why do tax managers cite this as such a challenge? Survey respondents were asked about their use of various technologies, and a surprising number noted how much of their technology was under-utilized.
Chaotic and reactive
This is data that should keep CEOs and CFOs awake at night. When asked to describe the state of their tax department and their ability to leverage technology, more than half of the respondents said that their approach was "chaotic" or "reactive." Only a few placed their departments at the top end of the scale.
Join our experts from Thomson Reuters and Acritas as they dissect how corporate tax department leaders should tackle these top-of-mind priorities in the year ahead.
While facing daily pressures from the board, management, and other stakeholders to become more efficient and effective, more than half of respondents felt that their teams were under-resourced. They also identified significant skills gaps, both tax-related and technological.
It’s a tight labor market, especially for tax specialists and also for the technology experts that might support them in their drive for automation. When it comes to talent and people, there are different approaches to addressing the skills gap and leading change. For example, there’s a clear move to develop the new role of tax technologists, a professional that will combine tax knowledge with technology and data skills.
A key finding in the report is that Optimized and Predictive departments are nearly twice as likely to have identified and addressed advanced skill gaps in their teams than departments in the other categories.
In a COVID-19 world, the need to work more efficiently is even more pronounced. Corporate tax departments already had a steadily increasing workload before the current crisis, and have been learning first-hand, under the pressure of mandated work-from-home, just how resilient their systems and how adaptable their people need to be. To thrive going forward, they will need to prioritize both technology and people, building and refining systems that increase the efficiency and value of both.
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