NEW YORK, March 26, 2019 /PRNewswire/ -- Regulatory change, enhanced scrutiny, rapidly evolving technology and new staffing paradigms will transform and reimagine tax departments this year, according to U.S. audit, tax and advisory firm KPMG LLP.
"We believe that the tax leaders who crack the code and think differently about how their departments operate and how they can contribute to their companies' growth will be the ones who thrive in the future," said Jeffrey C. LeSage, Americas Vice Chairman—Tax, KPMG. "Embracing these trends now could bring significant value to tax departments today and to their overall organizations tomorrow."
Here are insights from KPMG's top tax leaders on each of these emerging areas:
#1: Regulatory Change and Compliance Challenges Will Continue
Coping with legislative and regulatory changes will continue to be a top strategic priority for tax functions during 2019, said LeSage. "Many companies may be benefitting from the new corporate tax rate in the United States, but key questions on reporting and compliance may be unresolved for months, if not years."
"When you factor in the uncertain trade and tariff landscape, it's clear that tax directors need to focus their teams on monitoring, modeling and, where appropriate, capitalizing on the new tax environment. They also need to closely watch global tax and political developments that may affect operations here and abroad," LeSage added.
#2: Tax is Getting Greater Attention Across and Outside the Organization
"In corporate America, attention and sensitivity to tax have never been higher," said LeSage. "U.S. tax reform, coupled with an increasingly complex global economic and tax environment and the ongoing drive for value, is placing ever-greater demands on corporate tax functions."
Tax leaders must now be ready to field questions regularly from board members, senior executives, investors and others about the new law's impact on tax projections, consequences for processes and planning, and the options for how their organizations can navigate in the new tax landscape, LeSage added.
#3: Technology's Role in Tax's Success
New technologies could be a welcome resource for tax directors, according to KPMG. Tax compliance now requires massive, increasingly granular amounts of data from many sources, and more companies are seeing the value of aligning tax data with overall financial and risk management systems. Yet, according to Will Williams, National Managing Partner—Tax, KPMG, "many tax directors tell us their departments are lagging the rest of their organization in exploring and using intelligent automation capabilities such as process robotics, machine learning, and cognitive. Technology is advancing so rapidly that it's very difficult to keep up."
Despite any pressure to keep overall investment costs down, Williams said more spending for technology will be critical for the tax function and for the company overall. "Whether the choice is to build in-house, buy from third-party providers, or both, tax departments need to be able to embrace the full range of solutions so their organizations can keep pace with developments and with competitors, and so they can ultimately reap the benefits of enhanced efficiency, greater insights, and forward-looking tax risk management."
#4: Tax's Staffing Needs Are Evolving
The increasingly technology-based work environment requires different skills than those of the tax department's traditional professionals. "No matter how an organization manages its tax requirements, tax directors looking to build a best in class tax department will need to continue recruiting and developing tax professionals who understand technology as well as having some technology professionals who understand tax," said Williams. "They'll also need to foster and enhance communication skills in their staff, so they can work effectively across their organizations."
About KPMG LLP
KPMG LLP is one of the world's leading professional services firms, providing innovative business solutions and audit, tax, and advisory services to many of the world's largest and most prestigious organizations.
KPMG LLP is the independent U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's independent member firms have 207,000 professionals working in 153 countries and territories. Learn more at www.kpmg.com/us.
SOURCE KPMG LLP