The Arguments for TX

Resonating with tax transformation’s varied stakeholders

The arguments for tax transformation (TX) are in stark contrast to those for tax tech, which typically center around requirements (e-invoicing and other tax authority mandates), efficiency, or automation.

While these remain good arguments, this newsletter aims to tap into the growing realization that, somehow, they are no longer enough. The search is underway for better value, less risk, and greater clarity & control than echoed by the old battle cries.

The main factor at work here is that in the face of digitalization, the creaking edifice of traditional tax needs a major overhaul, not more patchwork fixes – but for that to happen, two hurdles must be overcome:

1. Tax itself must acknowledge that technology fundamentally changes the way tax works, including the role humans play; and,
2. Framing that effectively so stakeholders of all persuasions will back it.

That can be a tough ask. E-invoicing is grabbing headlines, and AI suggests it might be a cure-all (it won’t be, but under the proper stewardship over time, it will be a potent productivity tool).

Even so, a shift is underway. Clearly, the troublesome tax tech merry-go-round needs firmer foundations, but different arguments for TX resonate differently with different people. Here’s a sample:

• The pioneer innovator – purpose and meaning; “be all you can be” for your company and your career.
• The tax professional – a new vision; what good looks like on the other side of the digital divide.
• The finance group – simplification; automate compliance with seamless, direct flows of accurate data to tax authorities.
• The pragmatist – the cost of inaction; the steady loss in efficiency and effectiveness, and the human and financial cost of not taking action in response to rapid change.
• Europe and the US – US taxes are not ‘rest of world’ taxes and vice versa, especially from a solutions perspective.
• The CFO – remove the risk of failure; technology projects only fail if you are not at home with technology in the first place and rely on others instead.

Note that these arguments do not lead with ROI calculations. Like TX itself, financial rewards come from motivated, tech-empowered people, not business process automation rooted in old-world thinking.

Travelogue tales: We have been working on arguments and socializing action plans at a large multinational for a year, so “selling” TX is not to be underestimated.

However, there is one point of reference everyone understands – the low cost and low risk of starting a transformation journey instead of an IT project. Nothing works better than demonstrating an early track record of success.

What’s your next step?