Managing IT challenges may soon become core competency of tax professionals

The findings of the EY survey highlight how the tax function is evolving to keep pace with digital advances and helping companies in their transparency and compliance journey

With tax reforms leading to IT driven systems, majority of CFOs and tax professionals feel that over the next three years the core competencies will move from tax and technical skills to managing new technological challenges, an EY Survey said.

"As per the Indian survey, over 90 per cent of the respondents believe that core competencies of the professionals will move from tax and technical skills to process and technological skills over the next three years. Similarly, most of the companies (98 per cent) in our global survey believe the same," EY said.

The 'EY Tax Survey 2018 - Reimagining the tax Function' had invited views from the leading CFOs (Chief Financial Officer) , tax leaders and senior executives across 15 sectors and industries in India, including public and private organisations as well as global corporations. Vast majority of these have turnovers of more than Rs 1,000 crore.

The survey said while 15 years ago the tax functions may have been focused almost exclusively on tax technical and planning skills, organisations today are in search of tax people who are able to manage new technology challenges.

With rapidly changing and transparent global tax landscape and advent of technology, it is imperative for the organisations to hire the right mix of talent who can equally manage process and leverage technology to improve consistency, quality and efficiency, it added.

"This topic becomes even more relevant from an India perspective owing to the large scale tax reforms powered by technology (more specifically GST) that have been and continue to be undertaken by the Indian Government," the survey said.

The findings highlight how the tax function is evolving to keep pace with digital advances and helping companies in their transparency and compliance journey.

78 per cent of the respondents believe they are not adequately prepared for the new avatar of tax function and consider that there is an urgent need for tax functions to better leverage people, process and technology to effectively deal with the external environment and add value to the business, it said.

Globally, a vast majority of organisations are finding that attracting and retaining appropriate talent is a challenge in today's tax function.

A digital skillset (e.g. proficiency in basic technology tools such as business intelligence tools, automation, data governance and analytics) in a tax professional is a rare find, it said.

Around the globe, 89 per cent of the tax and finance function is grappling with the evolving talent needs and shortages of the right skills. In India, the percentage notably stands lower at 67 per cent, the survey said.

The reason for higher confidence in India can be attributed to higher agility, larger talent pool and a generation that has leapfrogged, it added.

EY India Partner and National Leader (Business Tax Services) Garima Pande said with the increasing demand for transparency across board, the tax function needs to not only be agile, but also invest in technologies and tools to keep pace with the fast pace business environment.

"Essentially, there seems to be a valid business case for the tax function to revisit the operating model particularly from the people, process and technology aspects, and organisations with inertia or lack of will to move on it fast are likely to be left behind in today's highly competitive environment, Pande added.