CFOs and tax leaders optimistic about transformative impact of GenAI on tax management and operations amid rising cost and regulatory challenges, survey finds

• 87% of CFOs and tax leaders surveyed believe generative AI (GenAI) will drive efficiency and improve tax operations, up from 15% a year ago.
• Cost pressures emerge as the biggest challenge for tax operations for the first time in survey history.
• The struggle to retain and deploy tax and finance talent is peaking.

BANGKOK, 22 November 2024. The latest EY Tax and Finance Operations (TFO) Survey finds generative AI (GenAI) will help transform tax and finance functions, helping to address inefficiencies, talent shortages, and compliance with emerging reporting obligations, including those related to global minimum taxes. While 87% of chief financial officers (CFOs) and tax leaders say GenAI will drive increased efficiency and effectiveness, up from 15% in 2023, three in four (75%) say they are only in the early stages of their GenAI journey.  

The 2024 survey – which gathered insights from 1,600 CFOs and tax professionals across 32 jurisdictions and 18 industries – concludes that tax and finance functions will need to transform to contend with growing cost pressures, a talent deficit, and compliance with new tax regulations.

Kasem Kiatsayrikul, Partner and Tax Leader, EY Thailand, says:
“GenAI is already revolutionizing the tax and finance functions by helping manage complex reporting tasks that require vast amounts of data. It equips tax professionals with a transformative mindset, enabling them to work more efficiently and optimize their time to focus more on strategic tax activities. Additionally, insights derived by GenAI improve decision-making, ultimately unlocking greater value for organizations. While the survey indicates that many leaders are still grappling with how best to take advantage of the technology across various areas, it is also time that they prepare for tax operations under new regulatory frameworks which rely on extensive data for tax-related analysis, decision-making and reporting. Developing integrated plans for adopting GenAI in tax operations will ensure thoroughness, reliability, and high levels of confidence in its implementation.”

Cost is now the biggest barrier to achieving vision and purpose
For the first time in the six-year history of the survey, cost pressures emerge as the top concern for respondents, with cumulative cost-cutting measures of businesses and inflation significantly eroding tax and finance functions’ budgets in real terms. Almost half (49%) of respondents say effectively managing budgets is their top priority, while 86% are focused on cutting costs to maximize the utility of their limited budgets.

Regulatory and reporting pressures drive need for data and tech transformation
The survey further highlights that tax functions face an increasing urgency to manage increasingly complex and data-heavy tax responsibilities to facilitate new tax operations. These include real-time digital tax filings and submission of tax information, as well as e-invoicing or e-tax invoicing, which are set to become mandatory in nearly 100 countries in the near future. Duties and responsibilities of tax functions also include compliance with multiple guidelines from the Organization for Economic Cooperation and Development (OECD), such as the exchange of personal financial information across borders, intercompany transaction cross-border data sharing, including BEPS 2.0, which sets a global minimum tax rate of at least 15% for large corporations. The survey found that 42% of organizations anticipate significant adjustments to prepare data for international reporting and compliance with Pillar II, and 82% expect to make moderate to significant changes in their data processing and organizational tax reporting processes.

“Mounting regulatory and reporting pressures continue to be a strain for tax and finance functions and businesses are struggling to put the right data and technology in place to address these challenges. Redesigning tax and finance functions with GenAI as a key assistant and personnel who can harness GenAI most effectively can ensure that these functions transform into intelligent operations which will not only overcome pressures and challenges but also deliver value and foster confidence within their organizations.” Kasem adds.

Talent pressures on tax and finance functions approach crisis levels
The talent gap is yet another critical challenge, with 70% of tax and finance leaders feeling the impact of fewer accountants entering the profession while senior cohorts retire. More than half (53%) say they are struggling to retain and attract qualified people. The survey further reports that 62% believe that employees without a university degree are an increasingly important source of talent. 

“The talent gap has reached crisis proportions. Employees are being called on to do more with less, but businesses also want tax professionals to spend twice as much time on strategic tasks than they do on routine work. To facilitate this, many businesses are seeing outsourcing and co-sourcing as another solution, particularly with the budget constraints and the need to invest in technology and GenAI.”, Kasem explains.

More than half of respondents (55%) say GenAI won’t lead to a reduction in the tax function workforce. Instead, companies will reallocate their tax and finance employees’ time to more strategic, high-value activities and away from routine compliance tasks.

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This news release has been issued by EY Corporate Services Limited, a member of the global EY organization

About the survey

The 2024 EY Tax and Finance Operations Survey was conducted by Oxford Economics from June to July 2024.
The study queried 1,600 executives across 32 jurisdictions and 18 industries, to understand how tax and finance functions are being affected by change.

APAC no. 15001439