NEW YORK, August 31, 2022 — The Fortune 500 tax department is at a pivotal moment of transformation, responding to a multitude of forces disrupting the profession as we know it. While there are clear bright spots in the modernization of skills and diversification of tax talent in the last two years, the profession still has a way to go in its adoption of technology, application of data and approach to hiring.
According to the KPMG LLP annual report, “Tax Reimagined 2022: Perspectives from the C-suite,” 52 percent of C-suite executives are not leveraging tax data to scenario plan or model for tax policy changes, a mild improvement over last year’s 69 percent. And 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 data to inform 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 complexities, it’s clear that companies are still missing opportunities to add business value by not leveraging tax data.
However, the report, which features insights from 300 C-suite executives at organizations with $1 billion or more in revenue, indicates that the profession is moving the needle with promising investments in diverse talent, a greater willingness to upskill inhouse employees, and a new focus on digital agility, creating a slow but steady shift in the overall make-up of the future tax department.
Leveraging the power of tax data
Navigating the talent landscape
Defining the future tax professional
Investing in more diverse pipelines
“The tax and regulatory landscapes are fast evolving and increasingly complex. Chief Tax Officers and Chief Financial Officers, in particular, are faced with numerous pressures to remain up to speed on all the moving parts and to offer stability even during times of great uncertainty,” said Greg Engel (@Greg_Engel_KPMG), Vice Chair – Tax, KPMG LLP. “For these reasons, it’s imperative that C-suite leaders continue to prioritize investments in talent, D&A and technology to ensure the modern tax department continues to add maximum business impact.”
“Tax departments are stepping out of the past by modernizing the skill sets of their talent, embracing DEI, and upgrading 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 the ones best positioned to compete and succeed.”
“Data is the next chapter for the modern tax department,” said Brad Brown (@Brad_Brown_KPMG), Chief Technology Officer – Tax, KPMG LLP. “But until organizations realize the predictive power that tax data can bring to the entire organization and deploy a tech-first, tax-second approach to hiring talent that supports certain aspects of the tax department, they’ll continue to leave tremendous value on the table.”
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The KPMG “Tax Reimagined 2022: Perspectives from the C-suite” survey was conducted by Wakefield Research (www.wakefieldresearch.com) between May 18th and June 3rd, 2022, among 300 US C-suite executives at companies with annual revenue of $1B+. The margin of error for this study is +/- 5.7 at 95% confidence.
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