Corporate tax execs have trouble keeping up with tax changes
The biggest tax challenge for a majority of corporate tax executives is staying up to date with all the changes associated with the 2017 Tax Cuts and Jobs Act, according to a new survey.
The survey, by Bloomberg Tax & Accounting, polled 337 corporate tax executives and found that 57 percent of them indicated their biggest tax challenge is staying up to date with the TCJA changes.
Senior tax leaders see an increasing role for the tax department in business strategy. An 83 percent majority believe the tax function should support major transactions, while only six in 10 think they are contributing in that area today. Sixty-three percent believe tax departments should support company-wide efforts to manage risk, but only 36 percent reported that they are doing so today.
Technology is a big theme in the survey. Implementing new technology or making better use of existing technology was cited by 45 percent of the tax departments as one of their biggest challenges, with a majority of larger tax departments with over 10 staff members more likely to consider it a top challenge.
Lack of effective technology is prompting corporate tax departments to rely on manual spreadsheets and processes to work around gaps in the various systems used to compute tax provision estimates for financial statements. Forty-nine percent of the survey respondents reported relying on spreadsheets or being challenged by technology gaps to automate tax provision calculations, while 42 percent indicated they lack timely access to data that drives calculations. The survey found that 87 percent of the tax professionals polled anticipate more automation in the tax function.
The skills needed for a senior tax professional are changing. Recruiting and retaining tax employees is a challenge, with 69 percent of the tax executives polled indicating that proficiency in data analytics and modeling will be a top requirement in two years, up from 46 percent who believe this skill is required today. Three out of four respondents said proficiency in technology systems for finance and tax will be a top requirement of tax leaders in two years, as opposed to 61 percent of survey respondents who think this is a required skill today. Identifying talented tax professionals is also a challenge with 56 percent of the survey respondents reporting they have difficulty recruiting and retaining talented tax professionals.
“The results of our annual survey provides valuable insights into the challenges and opportunities corporate tax leaders are facing as they make strategic decisions tied to people, process, and technology,” said Bloomberg Tax president Lisa Fitzpatrick. “This provides them with a basis for how their peers are viewing the future of the tax department within their organizations and provides the pulse on current state of corporate tax departments. Bloomberg Tax is committed to providing the intelligence and tools needed to not only stay on top of changes — from tax reform to BEPS to IRC conformity — but fully understand their implications for different types of businesses operating in different jurisdictions.”
The survey was presented at last week’s Bloomberg Tax Leadership Forum. “The top two challenges were current awareness along the lines of legislative tracking and keeping up with tax reform,” said Benjamin Jung, director of federal tax at Bloomberg Tax. “In reality, I think that’s a bit broader than the tax legislation. The other top challenge identified in the survey was overall compliance. The number one reason for that being identified was the increase in complexity, and the increase in the workload, that give rise to a more articulated need for hiring and retaining talented tax professionals.”
A copy of the survey is available here.