Author: Ganesh Ramaswamy
Partner, Kreston Rangamani & Regional Tax Director, Kreston Global
Ganesh has extensive experience of more than 30 years in providing specialist tax services, particularly to large privately-owned groups, with particular strengths in the property, retail, healthcare and hospitality industries. He has supported various entities with specialist advice on tax-effective structures and restructures, cross-border transactions on account of outbound and inbound India investments, mergers, acquisitions and divestments. Ganesh has also worked with stakeholders across businesses to deliver solutions such as tax due diligence, tax consolidation and restructuring of large family businesses in the Middle East, Asia, and Singapore.
May 13, 2022
The digitalisation of tax is an extensive subject and has a different meaning to governments, businesses and other stakeholders.
For governments, it is the digitalisation of tax collections and tax administration as governments all over the world have invested heavily in information technology. Due to this, the focus on businesses, tax advisors and other stakeholders is also undergoing a transformation. Businesses and tax advisors have started embracing tax technology in order to comply with the new electronic reporting requirements and, more importantly, to leverage automation to make their tax functions operate more accurately and efficiently.
The surge of the digital economy makes it increasingly possible for businesses to reach markets where they have no physical presence and still generate substantial revenues without this presence. Under the existing international tax rules that allocate taxing rights on business profits on the basis of physical presence, this model avoids payment of taxes both in the source state and the residence state.
While each of the above aspects of digitalisation is distinct, all of them are coming together to impact the world of tax compliance and tax advisory in a profound way. Tax policies are changing at a faster rate today than they used to be a decade ago, particularly when it comes to reporting requirements. This resulted in Kreston Global continually working with clients, in learning and applying new rules and techniques, to keep pace with and adapt to technological developments that are happening at such a fast pace around the world.
The Covid-19 pandemic has accelerated the trend towards tax digitalisation, digital transformation and the need for strong data management as there has been a tremendous increase in global reporting requirements. At Kreston Global we believe that, in five years’ time, we will all be working in the area of tax compliance, with technology that does not exist today. We work with our clients to stay agile, and monitor the developments in the tax and technology environments, by adopting new and improved approaches toward tax compliance and tax management.
Meanwhile, through artificial intelligence and robotics, tax authorities are multiplying their efficiencies, by understanding taxpayer behaviour, checking evasion and implementing tight tax audits. Kreston Global has worked out methodologies to help our clients in the digital disruption of global tax policies by:
a) Assisting clients in improving their data collection processes and data analytic tools to turn financial data into actionable insights for tax compliance.
b) Assisting clients to implement systems and processes, that ensure the quality of tax relevant data.
As tax functions of tomorrow take shape, it is an exciting time for tax authorities and tax professionals. Digitalisation will ultimately result in automation of compliance and tax authorities are bound to apply technology to develop more value. Kreston Global will help its clients to adopt and implement technological tools, to derive strategic insights and values so as to comply with tax functions.
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