In corporate tax, the pressure is rising
Growing complexity in the world of tax, and corporate pressures to do more with less, are creating opportunities for accountants to bring some much-needed relief to business clients, according to leaders at Deloitte Tax LLP.
“There’s been a 40 percent reduction in the corporate tax rate – but at the same time, our clients in tax departments are under pressure to deliver the same value in a more cost-efficient fashion,” Deloitte Tax LLP chairman and CEO Steve Kimble told a recent gathering in New York City. “The complexity of the law is going up, but the pressure to drive costs down is also going up.”
Even as changes both in the U.S., like the Tax Cuts and Jobs Act, and internationally, in areas like the OECD’s recent initiatives on digital taxation, have placed greater burdens on tax departments, he explained, businesses are expecting greater efficiencies from those functions.
What’s more, just as public accounting faces a staff crunch, so to do corporate tax and finance functions. “There’s not enough professionals in the market to serve this demand,” he said. “Our clients are finding it extremely difficult to identify the professionals to do the work that needs to be performed.”
“All of this change adds up to our clients needing significant assistance from us,” he continued. “They’re looking for us to play a more collaborative role, working with them more than ever.”
“We’re working to find ways to work more collaboratively with them,” he added – and one of the keys to that will be technology.
A lone company may not have the resources or expertise to develop tools to solve its tax problems – but Deloitte Tax does, Kimble said.
“We have the resources to develop solutions and then scale them across our client base, rather than the clients developing them individually,” he said. “These organizations are challenging their VPs of tax about where the investment in tax technology should be, against investment in other priorities. Wouldn’t a better strategy be to partner with an organization like Deloitte and customize our solutions?”
“Our journey with technology started with using it to augment our professionals -- for scenario planning, for instance,” Kimble said. “But we are in the process of a journey of transforming our tax practice from doing digital to becoming a more digital organization with a globally integrated technology platform -- going from ‘doing digital’ to ‘being digital.’”
Among the firm’s broad goals are:
- Perfecting world-class “data-wrangling” tools;
- Organizing the data in a way that Deloitte’s experts can make use of it;
- Bringing those experts in to identify insights from the data; and,
- Offering world-class knowledge management.
“We are doubling down on the digital transformation of our team, revitalizing our culture of innovation,” said Deloitte Tax’s chief transformation officer, Chuck Kosal. “We want our people to change how they work every day -- they spend a lot of time manipulating data, for instance, and spend very little time getting insight from the data, because they’re spending so much time getting it into a state where they can use it.”
With all that in mind, the firm is investing in a series of tools for tax clients, as well as a broad platform that unites them all with a single look and feel.
“All our clients will use the platform, but each of these new tools is laser-focused, they all solve an individual problem, but we’re moving them onto a single platform with a single user interface -- that’s the future,” Kosal said. “We’re building a common experience for our clients, but they’ll each use their own individual set of tools.”
Teams from Deloitte Tax units around the world presented six of the firm’s newest tax-related tools at the event in New York:
- Cognitive Tax Insight (or CogTax). This tool uses machine learning to sort through millions of transactions to help companies increase their indirect tax recoveries and identify areas where they have been overpaying.
- SynTax. Significantly upgrading the standard cover letter that accompanies tax returns, this tool uses rule sets and collections of insights from Deloitte experts to generate a much more customized, insightful letter that the firm’s tax experts can use to deliver more value to clients’ employees.
- Data Collection & Wrangling. Deloitte’s new tool gathers raw data from clients and classifies and cleans it so that it’s much more useful for analysis and reporting.
- MyInsight Signal Alert. Created in collaboration with a company called Signal AI, this tool makes it easier for clients to keep up with the latest developments in the field, using AI to identify relevant news, information and other content from around the world so that it can deliver relevant, useful updates.
- Tax-I. This tool combines artificial intelligence with comprehensive database of tax case and judgments to help companies and tax practitioners predict the likelihood of a particular tax position succeeding in court.
- Immersive Mobility. Created in collaboration with Deloitte Digital, this tool allows clients to give employees virtual reality tours augmented with data – whether it’s of new office space, or of a whole new city that an employee is relocating to. In the latter case, Deloitte Tax can add all sorts of valuable local tax information to the virtual tour – explaining how tax returns are filed locally, for instance, or what kinds of local taxes to expect.