Michael Mncube shares how technology is changing the compliance and reporting landscape.
In 2017, Australian journalist Peter Hartcher wrote that we were in a moment between technology and techno-panic. And in some ways, we still are.
As both individuals, and corporate entities, we seem to exist perpetually between a state of excitement at the potential to do things more efficiently through the adoption of new technology, and a state of apprehension at the pitfalls and challenges that come with rapid development.
Across multiple fields, professionals have repeatedly found themselves anxious at being left behind and uncertain as to where to start and what’s really necessary. And in this, the field of corporate tax is no exception.
The reality is that emerging technologies have opened doors to new opportunities for multiple role-players in the tax industry, from tax administrators and teams who’re seeking to transform and improve their tax-related business operations, to tax authorities that hope to advance their analytics and improve administration, counter fraud, and facilitate compliance.
One example of a specific technology that’s delivered an array of benefits for businesses is cloud-based Tax Management Software, which provides corporate tax teams with a unified view of all tax return related matters for all their taxpayers. Such end-to-end process management tools improve tax teams’ efficiency through integration with SARS eFiling, which automatically synchronises taxpayers’ details into a centralised location. And, because it is cloud-based, it is readily accessible from any location, on any device, at any time.
In general, technology adoption for corporate tax has begun with such tax management software in order to facilitate the electronic filing of tax returns in an efficient manner with improved accuracy, which is assured through the software’s ability to source additional and supplementary data, both within eFiling and from other third-party sources.
Within the South African context specifically, it’s becoming increasingly important for companies and tax teams to invest in technologies such as tax management software because SARS itself has made multi-billion rand investments towards the upgrade of its own technology and infrastructure systems, while expanding its specialised audit investigative skills to address and prevent tax avoidance.
A supplementary intention of these investments, upgrades and expansions is cited as “expanding and increasing the use of data using machine learning algorithms and artificial intelligence to connect the dots and… a very modern digital platform in which taxpayers can easily engage with SARS,” said SARS commissioner Edward Kieswetter in an interview with PowerFM.
Despite this increasing need to adopt such technologies in order to meet and align to SARS-driven industry advancements, a number of business considerations remain. In June 2021, Thomson Reuters released their annual State of the Corporate Tax Department Annual Report, which summarises the results of a survey of tax departments both within and outside the US from both small- and large-scale corporations.
Within the report, the most prominent challenge cited by corporate tax departments was tax reform, which echoed the results of the same survey in 2020. Additionally, specific tax workstream, and new technology and automation, ranked second and third as challenge areas respectively.
Respondents in the survey noted that technology had significantly improved communication within the tax departments, both in the realm of remote and in-office work, although those same improvements had not necessarily enabled the tax team to collaborate better with the rest of the business.
Where departments (nearly half of those surveyed) indicated they felt strained with regards to a lack of resources, they acknowledged that the most common strategy to address this was to introduce additional technology and automation, which in turn yielded a number of positive results for both the tax team and the business at large.
Sunil Pandita, president of the corporates division at Thomson Reuters, noted that “using technologies saves time, which in turn saves cost, improves time to value, and enhances the morale of the team members”. The survey went on to confirm that technology specific to tax compliance and tax provision was seen as the most value-added, due to its ability to make staff more efficient and improve the accuracy of their work.
While the benefits of investing in the adoption of technology for tax teams are many – accessibility and management on the cloud, integration with SARS and third-party sources, team collaboration, efficiency, and accuracy – a primary consideration must always be that the adoption and use of technology is informed by real purpose.
With the investments and developments in technology that we’re seeing from SARS, the adoption of trusted and reliable technologies, such as tax management software, is fast becoming a necessity for corporate tax teams, and no longer just a “nice to have because it’s new”.
