Digitization, leading-edge technologies, and digital business paradigms are now the critical building blocks of our lifestyles and economies. Moreover, the COVID-19 pandemic has underlined our reliance on such technologies, exhibiting their importance across all verticals to ensure business continuity.
Tax governance and professionals are not immune to the digital switchover. To them, digitization is not only about tax but also modernization, and they are totally involved in the lengthy and demanding digital transformation process to adopt the opportunities and challenges from now on.
Tax Compliance – Targeting 100% Automation to Curb Costs
Leading-edge technologies, including Machine Learning (ML) and Artificial Intelligence (AI), are now entering the heavily regulated tax compliance domain.
Geared toward handling tax fraud, decreasing errors, projecting market trends, detecting credit fraud, and automating activities, AI and automation are gradually transforming the way tax divisions work.
To achieve complete automation, a tipping point that organizations must look at is the degree of their workforce’s digital maturity and the constant development of their digital competencies.
AI, robotic process automation (RPA), and ML are some of the tech solutions that tax divisions can leverage to automate tax-associated tasks, thus enabling the electronic filing of reporting obligations, tax returns, or foreign information exchange.
Complete automation of tax procedures implies better efficiency, accuracy, and credibility of tax reporting and a considerable drop in operational expenses, resulting in an investment upsurge in digital resources portfolio expansion and research and development (R&D). Moreover, tax specialists can focus on ensuring an exceptional customer experience without the managerial burden on their shoulders.
Tax Consultancy: Predictive Analytics and Dashboard to Support Tax Consultants
Data analytics have been around for about two decades, but their usage in tax daily has only lately snowballed. As a field bound by complex data sets closely tied with intricate regulatory models, tax is the ideal use case for innovative technologies. AI and ML are solutions to help tax specialists leverage the opportunities of big data.
While the potential risk of the redundancy of tax consultancy may raise eyebrows, innovative solutions are negating these theories. By substituting the current manual data processing techniques with automatically created (tailored) reports, AI identifies tax fraud, levels up compliance security, and lets tax consultants focus on value-adding activities.
Further, real-time data feeding dashboards enhance decision-making and empower predictive analytics that improves tax consultants’ capabilities.
Blockchain – The Cornerstone of Future Interactions with Public Entities
Banking on the benefits of blockchain – efficiency, security, and velocity – the public sector can step up its services to unparalleled levels.
Globally, countries, including Brazil, Canada, China, the UAE, and India, are executing pilot tests for employ blockchain in public service provisions and establishing internal applications.
Many federal institutions in the US have deployed blockchain-driven programs for voting, company registration, identity management, general administrative services, and inland revenue.
While the private sector and public institutions have shown widespread interest in adopting blockchain, policymakers must catch on to this pace. For blockchain to become a universal solution, having a suitable legal model in situ that supports the exchanges and transactions is critical.
Also, blockchain aims to take over third parties in all transactions. As such, tax specialists and lawyers will encounter an unknown threat to their chief business.
Tech-enabled Approach is the Future
For decades, tech-based advances have been reshaping industries globally. While the tax industry has proven its mettle in taking up this digital revolution, it needs to capitalize on the opportunities brought to the table, thanks to technology.
With increasing competition and the ever-evolving digital behaviors of customers, tax specialists are now encountering the opportunities and challenges of digital transformation. By having new digital solutions and tools at their disposal, tax pros can deliver better services than ever before, making their offerings more meaningful and indispensable.
Miles Education is a premier training institute for finance & accounting professionals looking to earn US CMA and US CPA credentials. The focus of Miles Education has always been to up-skill students and professionals to help them be future-ready and enable their career progression through the US CMA/CPA qualification.
