Tax leaders prioritize use of data, AI, advance tech
In a recent survey, 95 percent of tax leaders across Southeast Asia reported that they are prioritizing the use of data, artificial intelligence (AI), and other advanced technologies. This shift aims to generate insights, enhance predictive analytics, and automate reporting processes as finance and tax functions grapple with increasing complexity stemming from evolving trade policies, geopolitical disruptions, and tighter regulations.
“Across Southeast Asia, we see more companies embracing transformation and automation, including leveraging emerging technologies such as artificial intelligence to streamline finance and tax processes,” commented Elaine Yeo, EY ASEAN tax and finance operations leader. The survey also revealed that 89 percent of organizations in the region plan to implement moderate to significant changes in their business operations within the next two years, including adjustments to supply chains and operating models.
As organizations navigate these changes, new tax regulations are intensifying the pressure on finance teams. A prominent concern is the OECD’s Pillar Two global minimum tax regime, which establishes a 15 percent global minimum tax on multinational corporations. A staggering 92 percent of Southeast Asian respondents anticipate an increase in their overall tax liabilities once this new framework is enforced.
Despite the anticipated challenges posed by these new regulations, the survey indicates that only 15 percent of organizations in the region feel fully equipped to comply with Pillar Two reporting requirements. The findings underscore a notable gap between the impending regulatory landscape and current preparedness among organizations.
Furthermore, the survey highlighted that technology adoption faces significant hurdles. About 65 percent of respondents identified a lack of a sustainable data and technology strategy as the primary barrier to transforming their tax functions. This challenge could hinder efforts to integrate advanced technologies effectively, exacerbating the difficulties posed by the evolving tax environment.
The integration of data and AI is not merely a matter of compliance; it is increasingly viewed as essential for operational efficiency. As organizations seek to modernize their tax functions, the implementation of AI and data analytics can lead to more informed decision-making, reduce administrative burdens, and improve accuracy in reporting. However, the path toward achieving these benefits is fraught with obstacles that require strategic foresight and investment.
As the industry evolves, tax professionals are tasked not only with compliance but also with leveraging technology to drive value within their organizations. With 89 percent of respondents preparing for significant operational changes, the urgency for a robust technology framework is clear. The ability to harness data and AI effectively will likely determine which companies thrive in this new regulatory landscape.
In conclusion, while the overwhelming majority of tax leaders in Southeast Asia recognize the importance of technology in navigating the complexities of modern tax regulations, the journey toward effective implementation is still in its infancy for many. The impending changes brought by global tax reforms, combined with the challenges of technology adoption, will require a concerted effort from organizations across the region to adapt and succeed.
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