In today’s rapidly digitalising world, it’s worth examining whether corporations are truly embracing the Tax Tech transformation.

The 2024 Challenges and Changes in Indirect Tax and Compliance report highlighted compelling insights that deserve further exploration. This article delves into some of those findings, offering not only reflection but potential solutions as well.

One of the most striking points from the report was how success is measured within indirect tax functions. When asked about performance metrics, the top responses were accuracy and timeliness of filing, cited by 91% and 84% of respondents respectively. This is particularly noteworthy because these are two areas where technology excels. With the right digital tools and reliable data inputs, automation can significantly enhance both speed and precision, hallmarks of effective tech implementation. To me, this highlights how indirect tax should be a key area technology is focused towards. 

What stood out even more, however, was that only 27% of respondents cited involvement in strategic decision-making as a success metric. This suggests that while corporations are leveraging technology to streamline compliance and operational efficiency, they may be underutilising its potential in higher-level tax planning and strategic insight. Given the rise of advanced analytics and AI-driven forecasting tools, this represents a missed opportunity, one that forward-thinking organisations could capitalise on in the years ahead.

On a more encouraging note, the report highlights that many indirect tax department leaders are already thinking strategically about how to respond to these emerging challenges. Nearly 70% of respondents indicated that their departments are prioritising training existing staff, while over 50% are planning to enhance their technology capabilities, including the adoption of advanced tools powered by artificial intelligence (AI) to automate processes and reduce manual workload.

Interestingly, when it comes to hiring, the trend is also shifting. 39% of respondents said they are seeking candidates with technology expertise, compared to just 19% who prioritised traditional tax expertise. This signals a strong and deliberate move toward tech-centric talent acquisition, reflecting a growing recognition that digital skills are becoming just as critical, if not more so, than conventional tax knowledge in driving efficiency and long-term value within tax functions. 

Yet despite the growing focus on digital transformation, over 40% of indirect tax department respondents still identified technology and automation as key challenges. This highlights an important tension: while the need to adopt the right tools is widely acknowledged, particularly to keep pace with regulatory changes and enhance functional efficiency, implementing those solutions remains difficult.

I hope you found these insights into the evolving landscape of indirect tax and technology as thought-provoking as I did. From my perspective, one thing is clear: Tax Tech is still not fully understood, and that lack of clarity is contributing to a new wave of challenges for many firms. While I’m confident that ongoing innovation and development will help ease some of these growing pains, there’s no doubt that deeper research, clearer strategies, and more intentional implementation of automation will be essential for businesses aiming to stay ahead.