Tax leaders worldwide are grappling with an increasingly complex landscape marked by geopolitical uncertainty, fragmented regulations, a shortage of skilled professionals, and rapid technological advancements.
As global tax policies evolve, leaders must adapt to a dynamic environment where jurisdictions are competing to attract investment while promoting responsible tax behaviors and protecting their tax bases. These challenges are placing unprecedented pressure on tax operating models, requiring significant investment and transformation to ensure compliance and competitiveness in an ever-changing global economy.
The Organisation for Economic Co-operation and Development (OECD) has spearheaded efforts to address these issues through its Base Erosion and Profit Shifting (BEPS) 2.0 measures, which include a global minimum tax supported by over 140 countries. This initiative aims to curb tax avoidance and ensure fair taxation across borders.
Additionally, many jurisdictions are leveraging tax incentives to attract investment in green technologies and renewable energy, aligning fiscal policies with global climate change goals. These efforts reflect a broader trend toward international cooperation in shaping responsible and sustainable tax frameworks.
However, the push for global tax cooperation is facing resistance, particularly from the United States, where recent policy shifts suggest a return to competitive tax strategies. This shift could undo years of progress toward harmonized corporate tax policies, adding further strain to tax operating models.
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Both internal and external pressures are forcing organizations to rethink their approaches, with many needing to overhaul their systems and processes to remain agile and compliant in this shifting landscape. The pendulum, once swinging toward collaboration, now appears to be tilting back toward competition.
Amid these challenges, generative artificial intelligence (Gen AI) is emerging as a critical tool for tax leaders. By integrating Gen AI into their operations, organizations can streamline processes, enhance compliance, and boost productivity, allowing tax professionals to focus on higher-value strategic work. However, realizing these benefits requires significant retraining to equip professionals with the skills needed for new roles and the implementation of updated tax workflow processes to ensure accurate and verifiable outcomes. Embracing this technology is not just an opportunity but a necessity for staying competitive in a rapidly evolving field.
To navigate this complex environment, tax leaders must focus on three strategic imperatives outlined in a recent report: adapting to regulatory changes, leveraging technology for efficiency, and building a skilled workforce capable of meeting future demands.
By prioritizing these areas, organizations can create value and maintain a competitive edge. The report emphasizes the need for proactive steps, such as investing in technology and training, to transform tax functions and position organizations for success in a challenging global market.
