The future of tax – how different is the answer now to what it might have been 30, 20 or 10 years ago?
There is no question that most industries, in particular the accounting industry, is going through monumental change. From tax laws to technology, this rapid change has shifted focus for senior management on how tax will be managed in their businesses in the future.
At The Tax Institute’s 33rd National Convention, Tony Slater, QC, reflects on over 40 years’ experience on the key differences in the tax industry today compared to 10, 20 or 30 years ago and detailed three approaches that tax practitioners can take to benefit in the future.
“The things which have changed or not changed over the past 40 years can be summarised as being compliance activities, complexity and cooperation. Compliance is less and less a part of tax practice, as electronic systems enable taxpayers to file their returns directly and the tax office to pre-fill their returns. Filing returns and having them assessed has been displaced by tax office audit practices,” Tony says.
The impact of technology to all industries has been heavily publicised. Bill Gates proposed a tax on robots to cushion the impact of job losses and a similar issue was highlighted in a report from the Inspector-General of Taxation stating that with technology replacing compliance work, a corresponding shift in education and training needs will follow. There are increasing opportunities for tax practitioners in advisory work – combining deep technical knowledge overlaid with broader business skills.
On the second item; complexity, Tony adds “The world has become more complex. The tax sector has become vastly more complex. It's gone from being five centimetres to being 20 centimetres in thickness, and that's a major issue for practitioners.”
However, cooperation is perhaps the most important thing. “Forty years ago, the tax office and practitioners cooperated with each other and talked to each other constantly. We lost that in the '80s and '90s. It's coming back now, and it's an important part of tax practice, that the tax office and tax practitioners work together. It's our tax system, not their tax system,” he adds.
Taking advantage of the opportunities that are available in further requires tax practitioners to keep three things in mind. “The first is that they should be on top of tax law as it is for the time being, be aware of the changes, keep up to date. The second, is that they should understand the taxpayer's business, whether they're practitioners advising the taxpayer or whether they're tax officers investigating the taxpayer. The third, is that they should be flexible and adapt to changing circumstances as they arise.”
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