More than half (52 percent) of C-suite executives are not using tax data in scenario planning or modeling for tax policy changes, a slight improvement from 69 percent last year. That’s according to KPMG’s annual report, “Tax Reimagined 2022: Perspectives from the C-suite.”
When looking at other business implications, such as leveraging tax data to align with ESG priorities, 68 percent of respondents say they are not currently using tax data compared to 55 percent in 2021, and 60 percent say they are not using the data to inform the overall business. strategy – slight progress from last year’s 62 percent. Against the backdrop of significant tax and climate reform, ongoing negotiations to overhaul the global tax code, and years of regulatory complexity, it is clear that companies are still missing opportunities to add business value by not leveraging tax data.
“The tax and regulatory landscapes are evolving rapidly and are increasingly complex. Chief tax officers and chief financial officers, in particular, face multiple pressures to stay up to speed on all the moving parts and provide stability even in times of great uncertainty,” said Greg Engel.(@Greg_Engel_KPMG), Vice President – Tax, KPMG LLP. “For these reasons, it is imperative that C-suite leaders continue to prioritize investments in talent, D&A and technology to ensure that the modern tax department continues to add maximum business impact.”
However, the report, which contains insights from 300 C-suite executives at organizations with $1 billion or more in revenue, shows the profession is moving the needle with promising investments in diverse talent, a greater willingness to improve internal employees and a new one. focus on digital readiness, creating a slow but steady shift in the overall makeup of the future tax department.
“Tax departments are breaking out of the past by modernizing the skill sets of their talent, embracing DEI and improving the technology they use to plan for the future,” said Rema Serafi.(@RemaSerafi), National Managing Partner – Tax, KPMG LLP. “Those organizations that embrace this change will be those best positioned to compete and succeed.”
Other findings of the report:
Using the power of tax data
- Sixty-five percent are not using tax data to inform decision-making about mergers and acquisitions.
- Sixty-four percent are not using tax data to prepare for or respond to audit requests.
- Fifty-six percent are not using tax data to do predictive modeling.
Navigating the talent landscape
- Eighty-three percent say it has been difficult to recruit tax talent in the past year.
- Seventy-nine percent say it has been difficult to retain tax talent in the past year.
- Fifty-three percent say it has been difficult to recruit talent with the right skill set.
- Fewer C-suite executives say they are willing to outsource or outsource their tax department in 2022 (43 percent vs. 65 percent in 2021).
- Forty-eight percent are keen on skilled workers, an increase of 12 percentage points over 2021.
Identifying the next tax professional
- The C-suite (46 percent) ranks coding as the top skill needed to ensure today’s tax department remains competitive, compared to 28 percent in 2021.
- Seventy percent rank scaling technologies (cloud, D&A tools, analytics and visualization) as most important to identifying and utilizing tax talent.
- Sixty-six percent rank emerging technologies (AI, blockchain, metaverse and quantum computing) as second most important, followed by an understanding of spreadsheets and databases (58 percent).
- Most leaders (57 percent) still prefer to hire tax professionals who can learn technology over technology professionals who can learn tax.
Investing in more diverse pipelines
- The majority of survey respondents (54 percent) are setting goals for outreach to underrepresented groups (+8 percentage points from 2021).
- Fifty-five percent say their organizations are recruiting from non-traditional colleges and universities (+10 percentage points from 2021).
- Eighty-three percent witness that more female candidates and employees join this profession compared to previous years.
- Seventy-two percent are seeing more candidates and hiring from underrepresented groups.