This article is brought to you by guest contributor Kenny Trinh.
Have you wondered where the future of taxes and new technology is going? You can find out by reading it here.
We are at a turning point in the way we do taxes. With the large issues that are affecting or disrupting the entire industry, there are new complexities, opportunities, and pressures on business that are calling for change. As digital tax function is now evolving at exponential rates, these technologies are becoming more strategic components in enterprise transformations.
With tax executives having to act simultaneously with business advisors and tech-savvy individuals as well as tax diplomats, the gap to the C-suit and the representing tax’s value propositions needs to be bridged in this digital age. It’s not enough to simply determine if you should buy a Chromebook or another excellent piece of equipment, there is more to the changes in tax technology than that.
Change Driving Legislation
Over the past year, the social, economic, and even political fabrics of many countries worldwide have been defined by nationalism and significant shifts that no one would have thought possible. However, as these changes continue to take place, there is going to be a trend toward digital taxation that will require the right technology.
It’s not like getting a gaming laptop, either. The tax reform for everyone, including individuals, sole proprietors, and even corporations, is starting to develop beyond just reading specs or reviews. Almost all leaders are leaning towards primary economic legislation that will change the tax reform as you know it. The latest news on USA trades tax should be a huge indication. Many tax legislations worldwide are being reformed dramatically to include more advanced digitization as well as specialized technology.
Each country that is making tax reformations are affirmations that are in line with the fact that government officials are calling for more change that will drive where tax technology goes next.
Technology Changing the Tax Process
Tax functions are increasingly needing to operate across a broad range of fronts. These fronts include the digital, disruptive megatrend that is enabling things like real-time analytics, real-time visibility, and the heightened expectations that go along with it as well as real-time access to these accelerated technologies.
Many organizations are trying to figure out how to leverage technology and operate more effectively on the tax frontier while meeting the requirements of real-time data. New tax technology that includes blockchains, robotic process automation (RBA) along with artificial intelligence, is changing the way transactional data is being done. These things can help alleviate risks and improve both efficiencies and give businesses critical insights that they couldn’t get with past approaches.
How do these things benefit tax functions?
Well, by bridging the communication between business financial systems and past transactions, there is a foundation for real-time data. Have a look.
Blockchain creates an environment that makes every transaction done open, available in real-time, and verified at the same time. The application in taxes has incredible potential. There is now the possibility to do retroactive analysis along with gather historical financial information.
RPA is just another evolutionary step for businesses. RPA provides businesses the ability to facilitate a workforce virtually that is faster, cheaper, and more accurate than human beings. TaxBots are a tax technology that is already being implemented to help accelerate tax compliance, sales, and provisions.
AI is similar to RPA, and it is helping to deliver many benefits to the tax sector. There will be improved decision making with the implementation of AI, along with a wealth of information. The information loaded in AI can include tax codes, case laws, and administrative guides.
Companies will need to determine if they are going to implement this technology and how it will be managed. Will it be managed in-house or outsourced? These are vital details that need to be discussed as these tax technologies are becoming more critical.
Tax Outsourcing is Permanent
The speed at which tax technologies are growing shows that they are not something that is going to be in and out. As there are more individuals and organizations conducting tax fraud and being delinquent in paying taxes, the use of such technologies is a way for the government to recover much-needed tax funds and put it back into the budget.
Such advanced technologies are going to make it harder to defraud the government or hide both in and outgoing income. Traditional tax models left much room for grey areas to take over the whole taxation process allowing individuals to go years without being suspect of fraud or delinquency.
Using a more advanced technological taxation system on a global scale will help to alleviate any headaches that once came with the tax industry and helps to erase human error. Therefore, it only goes to show that these technologies are going to be a permanent thing, and for that reason, so is outsourcing.
Many organizations do not have what is needed to use these technologies in-house, and outsourcing just makes business sense.
In today’s dynamic world, organizations and governments don’t only have the infrastructure but have legislative changes that make working with tax technologies a possibility. The tax function is becoming more elevated and is being implemented into boardroom strategies.
It is essential that here be more effective communication between finance administrators and tax leaders to help make a move towards a more revolutionary tax system more effective.