iStockDigital transformation is the buzzword today in every activity including finance.
While in the field of tax, the Government has taken a lead in digital tax administration, the corporate sector is largely still focusing on Goods & Service Tax (‘GST’) filing as the key technology enabler. However, globally, and some corporates in India, have taken a head start in implementing technology beyond GST filings in their tax function.
The need for technology and automation in tax
Enablement of technology within the tax function has become urgent due to the following reasons:
Four areas for adoption of tax technology
The areas of adoption of technology in tax are summarised below. The way forward
While ‘off-the-shelf’ tax technology tools can help address some of the challenges discussed above, such as tax governance, our experience indicates that areas such as tax data handling, tax reconciliations and data processing need implementation of highly customisable technology and automation solutions due to:
A first step would be to understand various tax processes where technology intervention can add value and as a second step enable technology in the identified tax processes to gain the desired value. Several large organisations are also enabling technology in tax processes through managed tax services (where organisations are not keen to invest and maintain technology due to changing laws and regulations).
One word of caution while evaluating value add and benefits is to give more weightage to improving accuracy and processes in the tax function as opposed to evaluating only costs, as the cost of potential interest and penalties arising from inaccurate compliances can be much more at a later stage.
The writer is Partner, Head – Tax Technology & Transformation, KPMG in India.
While in the field of tax, the Government has taken a lead in digital tax administration, the corporate sector is largely still focusing on Goods & Service Tax (‘GST’) filing as the key technology enabler. However, globally, and some corporates in India, have taken a head start in implementing technology beyond GST filings in their tax function.
The need for technology and automation in tax
Enablement of technology within the tax function has become urgent due to the following reasons:
Four areas for adoption of tax technology
The areas of adoption of technology in tax are summarised below. The way forward
While ‘off-the-shelf’ tax technology tools can help address some of the challenges discussed above, such as tax governance, our experience indicates that areas such as tax data handling, tax reconciliations and data processing need implementation of highly customisable technology and automation solutions due to:
- the variations in data environments and manner of data recording of each organisation; and
- the variations in outputs expected.
A first step would be to understand various tax processes where technology intervention can add value and as a second step enable technology in the identified tax processes to gain the desired value. Several large organisations are also enabling technology in tax processes through managed tax services (where organisations are not keen to invest and maintain technology due to changing laws and regulations).
One word of caution while evaluating value add and benefits is to give more weightage to improving accuracy and processes in the tax function as opposed to evaluating only costs, as the cost of potential interest and penalties arising from inaccurate compliances can be much more at a later stage.
The writer is Partner, Head – Tax Technology & Transformation, KPMG in India.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Experience Your Economic Times Newspaper, The Digital Way!
Read More News on
ETRise MSME Day 2022 Mega Conclave with Industry Leaders. Watch Now.
...more
