Tax has never been higher up the agenda of governments, businesses, citizens, and other stakeholders. This unprecedented scrutiny – combined with sweeping changes in tax policies worldwide and increasing use of technology – is now transforming the tax environment, and will shape the tax systems and functions of the future.
The rising profile of tax in societies worldwide reflects a wide array of factors. For governments, the recent economic downturn has put public finances under heavy pressure. For citizens, the debate over whether companies pay their ‘fair share’ has focused attention on tax as never before. And for companies and policymakers, initiatives such as the OECD’s BEPS are creating both complexity and opportunities.
In parallel with these profound shifts, the global tax environment is feeling the impact of another disruptive force: the growing role of digital technologies across the entire tax landscape.
There are many manifestations of this change. For example, taxing authorities are going beyond e-filing to use digital to gain a deeper understanding of taxpayers’ behaviour. And, across the world, new taxes are being introduced that rely entirely on technology for compliance and enforcement.
Businesses must ensure their own tax processes and systems keep pace with these developments, especially on the compliance side. And as BEPS ushers in increased transparency and compliance, the tax function of the future will be shaped by the need for a solid technology strategy – both to comply with the rules and uncover opportunities.
All these changes bring implications for trust. Tax authorities’ drive to realise the benefits of technology can help to rebuild public trust in the tax system, by making tax more efficient, transparent and accountable. And companies can support progress by investing in their tax functions’ digital capabilities. As tax systems are transformed for today’s business environment, tax functions and tax authorities must follow suit.