Finance leaders are planning major investments in artificial intelligence over the next 12 months to bolster their tax function.
The KPMG survey, which polled 500 C-suite executives at U.S. companies with an annual revenue of $1 billion or more, found that most tax departments — 59% — are already using some form of AI, and many do not intend to stop there. The poll asked how much leaders are planning to spend on AI capabilities for their tax function over the next year, and found that the highest sum was also the most commonly cited: 40% of executives said they intend to spend $10 million or more.
The second most common response, at 30%, was more than $1 million and less than $10 million. Those with no plans at all to invest in AI capabilities were in the decided minority, representing only 2% of total respondents.
"Leaders also recognize these applications are only the first step in the AI revolution. Almost all agree that AI is the next frontier for corporate tax departments and are eager to move forward. And they're willing to bet big," said the report.
The report noted that the rise of AI may also alter leaders' human capital strategies, pointing out that efficient use of AI will be dependent on staff members who have the technical know-how to fully leverage it. This, said the report, means tax departments should increase the number of their professionals who possess skills in technology, computer science and data analysis.
This is borne out in other parts of the survey. For instance, between 2021 and 2023, the share of finance leaders who say they are recruiting data scientists and technologists has risen from 39% to 45%. The survey also found that the share of people who would prefer to hire "tax experts who can learn technology," versus "technology experts who can learn tax," shrank from 59% to 54% in the same time period.
"While accountants and tax attorneys will always remain the backbone of the tax profession, C-suite leaders are realizing data is the key to unlocking further value from their tax departments. Executives are beginning to modify their thinking around recruiting to seek out technologists and data scientists for certain parts of their organization," said the report.
The report noted, though, that recruiting these professionals may be a challenge, as many in such fields do not necessarily relish the idea of a tax career. To make tax more attractive to tax specialists, more organizations are trying to tout their high-tech credentials to possible talent; in fact, nearly half of respondents (47%) say revamping the perception of a tax career is their primary focus to attract and retain new tax talent.
"As corporate tax departments embrace more sophisticated AI applications, tax will continue to become firmly cemented within the technology-driven frontier of the future. C-suite leaders are dedicated to significant investments that can enhance or facilitate implementation of automation; and once organizations finesse their hiring to match these investments, technology will transform the tax profession," said the report's conclusion.
