Future of Tax Insights series episode 3: Transformational impact of technology

Transcript

Sabine Barlage
Welcome back to our Future of Tax Function Insight series. I'm Sabine Barlage and with us today is PwC's Australian Connected Tax Compliance market leader, Daniel Levin. Dan, welcome. In this series so far we have spoken a lot about how Tax can create greater value for the organization. Today, we'll explore how organizations can use technology to do this.

Now I know that technology is something close to your heart. So what stood out for you in terms of the responses to the technology questions in the Future of Tax Function survey Dan?

Daniel Levin
Thanks Sabine. It was really interesting to see the level of disconnect between what tax functions want to do with technology and what they're actually achieving. Organizations say technology is important for automating their compliance and reporting obligations, but either aren't making the necessary investment or if they do, haven't optimized what's been implemented. Our survey from participants showed that 40% said they were using tech solutions in a very limited capacity to manage tax compliance.

24% used automated controls in completing their tax processes. However, a resounding 79% said investing in technology is the answer to managing increasing compliance and reporting obligations, which really wasn't a surprise to us.

Sabine Barlage
Okay. Well, I guess the good news is that there is recognition that technology needs to play a greater part in compliance delivery. So how are we seeing organizations achieve this?

Daniel Levin
Well, in many organizations, there has been a shift by senior stakeholders to allocate more budget to automate compliance and reporting processes using technology. In October of 2022, a PwC Tax Pulse survey for tax directors showed that 71% are making digital investments to promote a business technology transformation agenda. So clearly technology is front of mind to simplify reporting, reduce risk associated with repetitive processes, and free up highly skilled professionals to focus on value added work.

We often observe that an early stage quick win that doesn't require a big ticket technology spend can be a really powerful way to get internal buy in from key stakeholders for a larger transformation agenda. And the great news of that is that there are more options than ever before, particularly using small automation technologies that can be licensed off the shelf for a relatively low cost and provide immediate transformation impact such as Alteryx for data cleansing and manipulation or even Power BI For analytical insights.

Sabine Barlage
That will be music to a lot of finance and tax departments ears. As we know from the other results of the Future of Tax Function survey, budgets are tight for technology investment, so how does PwC help clients to maximize their technology investment on limited budgets?

Daniel Levin
Well, we always start by beginning with collaborating with our clients to help them create a tax compliance and technology strategy. This involves determining a data strategy, establishing and creating a technology roadmap, how the tax functions should be set up, and ultimately your sourcing preferences. So let's hone in on two key themes. First, deciding on the best approach for investing in technology to ensure a continued return on investment which is creating or strengthening your in-house technology - technological infrastructure - will ensure your organization will have the solutions that's right for them. But these must be scalable to meet future demands. Buying a co sourced, outsourced or managed services solution from a trusted advisor where the technology is built in and does not have to be maintained in-house provides greater flexibility and results in shorter implementation lead times. Secondly, an integrated and tax technology suite has always been the utopia to be able to manage your compliance obligations regardless of tax type in a single integrated solution.

And this is possible now for the first time through our innovative global compliance management platform called Sightline. Sightline enables efficient exchange of documents, live monitoring of compliance processes, and a holistic access to all queries and responses, removing the need to search through emails and project status and information retrieval, reducing up to 80% of time taken on data gathering and analysis.

Sabine Barlage
So it sounds like there are options when it comes to technology. If you had to leave our viewers with some key messages to take away, what would that be?

Daniel Levin
Well, right now it's really exciting because tax and finance are involved in the most significant organization transformation we've seen over the past two decades, a shift to the cloud by major ERP vendors. This is creating a unique optionality and potential for finance and tax functions than ever before to manage compliance “on-system”. By involving tax as early as possible in these transformation projects, achieving end to end compliance management on system while minimizing the risk to downstream tax processes is finally achievable.

We're also seeing a shift to technology enabled co sourcing and outsourcing options. This simply did not exist before and at PwC our unique Connected Tax Compliance service is all about meeting you where you are - your technology and your people, our technology and our people. Third party technology or a combination of all of these provides the flexibility required to achieve true tax technology transformation.

Sabine Barlage
Thanks, Dan. For more information on our human led tech powered connected tax compliance approach, visit our website. Thank you for coming. We hope you will be here for our next conversation, which will explore the opportunities for tax to create value beyond the return.