Reinvention requires stronger skills in the tax function

Companies seeking to reinvent business models or launch new strategic initiatives almost always benefit when tax executives are looped in early on. But the findings from PwC’s inaugural Global Reframing Tax Survey, which drew responses from more than 1,200 executives in 47 countries, shows that many tax functions are focused elsewhere—stretched to capacity by regulatory shifts, compliance obligations and a deluge of data.  

• Only 43% of respondents feel they are well-placed to deal with the impact of regulatory change.
• Ninety-five percent say they have a skills gap in their tax function, in areas such as knowledge of AI, specialised tax expertise and data analytics.
• Just 32% of survey respondents say they are upskilling existing staff, and only 29% are hiring new talent.

Those skill shortages could hinder business model reinvention. Previous PwC research shows that when tax functions are involved in strategic initiatives at the front end, overall outcomes are better. Working through the tax implications of new ventures reduces the likelihood of disputes with tax authorities and can increase profits by two to ten percentage points.

The skills gap is especially urgent in AI and other advanced technologies that can help improve tax processes, increase efficiency, and rewire functions and tasks—provided that companies and finance teams have the skills in place to capitalise on. In the survey, 56% of respondents reported seeing benefits from the use of GenAI, and more than 80% expect GenAI to transform tax planning and strategy in the next three years.

Here’s how tax functions can close the skills gap and better support business model reinvention and other strategic initiatives.

• Start with a comprehensive skills audit to identify the biggest gaps and most immediate priorities. Look at traditional compliance capabilities along with expertise in areas like AI, data science and other new technologies. Don’t forget to include tax leaders in the skills audit, as they need strong skills to lead the function through transformation and technology adoption, as well as to advocate more effectively for tax strategy across the organisation.
• Invest in upskilling programs, including a mix of digital certificates and on-the-job training. Rebalance recruitment efforts to prioritise candidates with AI experience, data analytics skills and strategic thinking. As one tax leader PwC interviewed put it, ‘The talent pool coming now won’t be your traditional finance and accounting people. It will be more around people who are into software, AI, and technology.’
• Consider using external providers to address immediate needs—particularly for rapidly evolving technology—while maintaining control over strategic priorities and building long-term capabilities. Determine which skills you can continue to outsource and where you should build up internal expertise

By putting the right skills in place, leaders can ensure that tax is an inherent part of business model reinvention—right from the start.