Why any Tax Manager should be focusing on data

March 6, 2018
Leo van Loo

Have you ever stopped to think what your role as a Tax Manager will look like five years from now? And if you've already formed a picture, does that picture please you? In my case, it does. For the tax industry is becoming more versatile, interesting and more important to any organisation. As a consequence, you will have to become an expert on the opportunities of data and technology.

Data and technology? Am I saying that by 2022 all Tax Managers will be IT professionals? Certainly not. Your activities aren't about to change completely in the next five years. Fiscal legal responsibilities such as compliance, tax planning, risk management and cost-optimisation remain elements of your responsibility. However, there is a great opportunity for you to make a difference, if you manage to utilise the data that is being generated in the process. By using it more cleverly, you can add more value to your organisation. Not just financial value, but in terms of improving the quality and speed of processes themselves.

Risk and opportunity

Sounds nice, but what does it really mean in practice? Analysing data helps gain insight in concrete risks and opportunities. For example, you may be quicker to discover that no VAT has been charged where there should have been, VAT hasn't been re-claimed or invoices were paid twice. You can also efficiently monitor inter-company profit margins and gain insight in overpaid import tax. You may think that you already have good processes in place but I assure you that mistakes are still made on a regular basis. If you want to work on solving and improving these processes, and thereby have a direct contribution to the improvement of your company's cashflow, it is vital to know where things are going wrong.

Transparency

A more data-driven approach will also better prepare you for what tax authorities are expecting of organisations. The use of technology to benefit their inspections is on the rise as well as their demands with regards to data transparency of their subjects. Regulations such as BEPS require new reports to gain insight in matters such as your internal supply chain. Especially multinationals are facing a gigantic task, which is much easier to accomplish with a much lower risk of error if your systems are properly set up and data analysis applied.

Data doesn't lie.

I understand that all of this may still sound quite technical. However, the only thing you as a Tax Manager need to do is ensure that you gain access to the right data and know what that data can do when analysis technology is applied. Other elements vital to success are good collaboration with IT colleagues and the presence of user-friendly technology. These things are available and can be accomplished today. Why wait another five years? Go for it!