Leveraging Data Analytics in the World of Tax
The majority of Irish business leaders (70%) see data analytics as the emerging technology having the greatest opportunity. At the same time nearly half (48%) said that the inability to exploit digital analytics is a threat to growth. This is according to PwC’s 2017 CEO Pulse survey. Investing in Data Analytics is a strategic imperative and an immense opportunity having the potential to improve efficiency, create new and better user experiences and products and free up people to get involved in higher value efforts.
Says John Murphy, Tax Partner, PwC: “There is a great opportunity, however, to further leverage data analytics within tax functions for greater contributions to the bottom line.”
Businesses have a huge opportunity to use data analytics in their tax functions to optimise data for greater insight and efficiencies. PwC has invested heavily in people and technology to specifically help tax clients maximise the opportunities from their data to improve tax reporting and business decision making. PwC recently hosted a workshop showcasing new tax Apps, tools and interactive solutions to make tax work harder for businesses.
Speaking at the event, John Murphy, Tax Partner, PwC Ireland, said: "Data is at the heart of tax and business strategic decision making. The purpose of the event was to showcase the opportunities that data analytics can bring to tax functions, including optimising data assets and capitalising on untapped business intelligence."
Key drivers for companies to leverage tax data analytics include:
· The increasing trend nationally and internationally towards real time reporting in areas such as payroll and VAT requires companies to have a better handle on their data;
· The Revenue Authorities in Ireland have been investing heavily in people. skills and technology and are becoming more skilled in data extraction and analysis as part of their revenue audit techniques;
· With the increasing amount of time being spent by tax functions on data extraction to meet tax or financial reporting requirements, there is a desire to automate such processes so more time can be spent on value-added work;
· Tax functions have increasing amounts of valuable data. This data can provide insights into how the company can manage the tax costs of people mobility, supply chains as well as maximizing the tax benefits in areas such as Mergers Acquisitions.
Some key apps that were showcased were in the areas of mobility, VAT, corporate tax, employment tax, transfer pricing and Revenue audits as well as also sectoral specialisms such as aviation finance. The showcase also highlighted how tax functions can benefit from the automation financial reporting, data extraction as well as the integration of tax with broader analytics processes.
John Murphy added: “The key challenges in maximising data usage within tax functions include: the lack of easy access to clean and robust data; tax reporting systems not being optimised and multiple tax users making similar data requests absorbing time and goodwill with the IT function.”
“The tax function and professional of the future will be more data savvy and companies also need to embed the power of data into their recruitment activities.”