team discussion


Our digital future

A perspective for tax professionals

In five years' time, we may be working with technologies that are yet to be invented. What does that mean for tax professionals? Read about the five areas of technology advancement and trends that may affect tax professionals.

August 21, 2018

A blog post by Beth Mueller, partner and Tax Analytics Insights leader and Ben Booher, senior manager, Deloitte Tax LLP.

Today's digital environment in the tax profession may be characterized by a strange dichotomy. On one hand, we hear much talked about technology, the dramatic advances made, and the opportunities presented. We are inundated with explanations of exponential growth and Moore's Law, of the impact of artificial intelligence (AI), and of the potential disruption coming from such technologies.

On the other hand, our personal experience in the tax workplace can be very different. New technologies are often confusing, the excitement can feel like hype, and the real benefits seem to lie in a distant future.

Despite the dichotomy between what we hear and what we currently experience, technological developments in tax will be dramatic, with potentially dramatic improvements on professional satisfaction levels.

Trends in technology affecting tax

Advances in processing power, memory capacity, connectivity, artificial intelligence (AI), robotics, and blockchain technologies are changing our world. Of these general trends, there are five main areas of advancement that will materially affect the tax profession:

  • Data—big data sets, massively improved performance, and memory capacity at scale
  • Process automation—robotic process automation and integration of financial and other systems
  • Decision making—AI augmentation of compliance and consulting capabilities
  • The democratization of knowledge—publicly available and easily accessible knowledge
  • Open networks—talent sourcing, crowd problem-solving, and shared ecosystems

These trends will have a material impact on the way tax authorities collect and process data. Businesses will need to respond by making these trends the foundation of digital tax strategy and associated transformation.

Tomorrow's world

These developments pose a significant question: What will be the nature and volume of future work for professionals? What will tomorrow's workforce do to replace the time currently spent on today's processes? Ultimately, what will be the right balance between human and machine?

While digital transformation will require major change and pose considerable challenges, this future will also offer significant opportunity. Revenue authorities are indicating they will embrace technological change and use it to gain access to global data sets and thereby create more tax transparency. This will increase the demands on tax professionals coming from increased complexity, rapid change, and heightened risk. However, by embracing new technologies, tax professionals will be able to improve compliance processes, enrich analysis, and provide greater value to their organizations.

It may be challenging to be precise about what the tax digital future will be, but certain characteristics seem clear.

  • The tax will be data-driven, leading to a more holistic approach at the enterprise level, including tax. We will need to manage that data better and harness its power to act faster, provide richer insights, and create business value for the organizations we serve.
  • Big data will lead to greater granularity, precision, and accuracy. The tax will likely work with integrated datasets including all aspects of the underlying transactions—both the structured and unstructured data elements. This will allow enhanced analysis at the transaction level of detail rather than relying on the sampling and estimation used in the past.
  • Algorithms will increasingly be the way to apply expertise, knowledge, and experience. And tax professionals will need to apply that expertise earlier in processes as real-time reporting takes hold and accelerates the times at which data is submitted.
  • Robots will take more of the strain. Robotic process automation technologies will likely evolve, become easier and more affordable to deploy, and as a result, may become ubiquitous tools for professionals to use to streamline processes. In addition, they will likely become smarter, infused with AI, and therefore may have a greater impact.
  • The user experience will be more digital. Information will be consumed in a more personalized way through the video and other mixed-reality media. At the moment, work in systems such as email involves interacting through a keyboard. In the future, we might expect more use of natural language processing, talking to virtual agents, and connecting through online forums.

Tax professionals will likely continue to be deluged with a significant change of pace and associated risk as we continue into the digital future. It is hard to be confident of what precisely that future holds but you can discern today the defining digital trends, anticipate the impact that they may have, and set plans accordingly. That said, in five years' time, we will be working with technologies that have yet to be invented, which means tax professionals should continue to monitor developments and remain agile—to experiment and adopt new technologies.

And in that regard, it is perhaps worth keeping Abraham Lincoln's advice in mind: "The best way to predict your future is to create it."

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