New and emerging technologies, as well as the COVID-19 pandemic, are transforming the tax function and profession at an unprecedented pace. When Kate Barton started her career as an intern at EY, having qualifications in law and tax were a staple of a career in the professional services. However, fast forward three decades and these two qualification criterions make up only part of what many employers demand.
An understanding – and ideally practical experience – of digital reporting platforms, data cleansing and analyses, working with robotic process automation is becoming increasingly important for those joining the tax profession. To stand out from the crowd, gaining the knowledge on how the future may unfold with artificial intelligence, smart technology and pre-empting the progress tax authorities will make in their digital transformations will help those entering the workforce during a period of great change and uncertainty.
Tax directors, CFOs and advisors are now looking for individuals who offer transferable skills that allow the department to adapt to new requirements.
“The best tax person has the mixture of tax or finance and technology skills,” tax directors often tell ITR when they are recruiting. But, if forced to choose, in many cases they would choose the candidate who is good with technology and teach them tax in most cases. This means the traditional path of becoming a tax professional has been blurred and young tax professionals need to adapt.
This is where initiatives like the EY Young Tax Professional of the Year competition can help, because it fosters the next generation of tax leaders, knowing that the tax landscape is changing rapidly.
Here, Anjana Haines, managing editor of ITR, talks to Kate Barton, EY global vice chair of tax, about the changes and what this means for millennials, Generation Z, and those entering the workforce today.
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Kate Barton, EY global vice chair – tax, introduces the 10th annual EY Young Tax Professional of the Year competition.
Anjana Haines: You started your career at EY as an intern 35 years ago. How has the tax function and profession changed since then?
Kate Barton: When I joined EY as an intern 35 years ago, the tax profession was synonymous with paper documents and filing cabinets. Today, digital technologies seemingly undercut every aspect of the tax function and profession. Taxpayers now file tax returns remotely on their mobile phones, with tax authorities processing transactions in real-time. In recent years, blockchain, cryptocurrencies, the ‘gig economy’, and globalised mobile talent have all changed how taxation operates.
In such a dynamic marketplace, EY even launched its first direct-to-consumer personal tax filing service – TaxChat – to help individuals keep up with taxation and its constant evolution. More recently, during the COVID-19 pandemic, tax authorities have even expanded the remit of their traditional duties in some jurisdictions to engage in contact-tracing, largely because of the sheer scale of data they possess.
Looking back, taxes have always played an important role in everything from funding public services to incentivising organisational behaviour. At the policy level, it plays a big role in incentivising research and development programmes, such as more sustainable technologies, while also encouraging competition through tax rates in an increasingly globalised marketplace that is looking to secure foreign direct investment. In today’s marketplace, it’s an incredibly dynamic and exciting time to be a tax professional.
Anjana: What trends are defining the tax function and profession?
Kate: I think the greatest trend we are seeing is the rate and pace of change spurred by new and emerging digital technologies. Organisations are now reporting transactions in real-time, whereas digital technologies are driving increased transparency on tax matters, particularly when it comes to cross-border information sharing. From an operational point of view, there is now so much digital data that more than 100 of the largest multinational companies spend between 40%-70% of their time on data cleansing, according to the latest EY Tax Technology and Transformation Survey. Not surprisingly, compliance subsequently remains the greatest priority for many organisations and their tax functions, according to the latest EY Tax and Finance Operate (TFO) Survey.
Geopolitically, digital technologies have also created an incredibly sensitive global environment in which to operate. The world today is now far more interconnected and interdependent. It goes without saying that a ripple in some markets can spill over into other markets where there may not even be a substantial trading relationship. For multinationals operating cross-border, this can create an incredibly volatile regulatory environment when policies are changing all the time.
Anjana: How has the COVID-19 pandemic impacted the tax function and profession?
Kate: For starters, the COVID-19 pandemic has triggered an enormous swathe of regulatory change for multinationals to keep up with.
More than 138 jurisdictions to-date have amended their tax laws and regulations to tackle the economic impact of the pandemic. Tax filing deadlines have been pushed back, whereas tax rates have been cut for both individuals and industries hit hardest by the pandemic. All the while, tax authorities have played a pivotal role in ensuring solvency and liquidity, distributing stimulus to those who need it.
Globally, more than $27 trillion has been issued in financial stimulus to-date – that’s a staggering sum. Tax policy has been at the epicentre of government playbooks and their crisis management during the pandemic and will continue to remain so as governments look to recoup lost revenue and balance increasingly larger government deficits. As governments look to encourage mobility, tourism and investment in their local markets in the ‘new normal’, they are likely to also look to tax rates to encourage business investment.
Anjana: What does the tax function of the future look like?
Kate: Looking ahead, the future of tax is digital. Technology is rapidly changing how we operate, and why. Individuals should expect tax filing to become increasingly less complicated.
While organisations can expect more real-time reporting and cross-border information sharing, those organisations looking to keep-up with such a rapid pace of digital and legislative change, the solution will be to build what we call an ‘intelligent tax function’, one that operates alongside the C-suite, not behind it – communicating in real-time with other business units.
Today’s tax function revolves around three key activities: tax software maintenance; process change; and tax data collection. In the near future this will change to revolving around intelligent data management; process change; and report development. Of those companies surveyed in the latest EY Global Tax Technology and Transformation Survey, 73% already plan to increase tax headcount with people who have data and technology management skills.
Anjana: What words of advice would you give to somebody starting their career today, regardless of industry?
Kate: While tax technical knowledge is vital, literacy in digital technologies is imperative. The tax function and profession of the future is constantly evolving, and so are the technologies driving its transformation. The world will continue to evolve rapidly, so a willingness to learn, think creatively and build relationships – whatever the forum, digital or otherwise – will be key.
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Jennifer Wishnie, EY Young Tax Professional of the Year sponsor and EY global tax talent leader, talks about what skills students and graduates should cultivate as they enter the workforce.
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Young Tax Professional of the Year
2020 winners
Ashley Lim Siew Fern
Malaysia
YTPY Global Winner
"I feel really proud to have won in Malaysia’s name! I do believe this competition is unlike any other, as it allows participants to explore the interplay between strategic planning and tax planning. As a result, I’m now considering opportunities beyond traditional management consulting to perhaps tax consulting! I also believe the virtual pivot of the competition is really topical, as it reflects the real-world trend towards an increasingly digital world. The recent all-online experience has equipped us with enhanced connectivity, greater efficiency, and has fast-tracked professionals’ journey to master virtual communication skills for the future’s working world."
Madelaine Bewlay
UK
YTPY 2nd Place Winner
"I was honoured to compete as the UK finalist in this years’ global EY Young Tax Professional of the Year competition. Being awarded 2nd place was the cherry on top. The whole experience was an invaluable opportunity to share knowledge with other young tax professionals across the globe, and I was pleased to apply the learning gained during my time working in International Tax and Transaction Services at EY to the competition. Competing virtually, although a somewhat new experience, wasn’t too daunting, and still allowed greatly for networking opportunities!"
Joshua Mok
Oceania
YTPY 3rd Place Winner
"It has been a truly humbling experience to be announced as a top 3 finalist in this year’s EY Young Tax Professional of the Year competition. COVID-19 has changed how we work and interact with one another, but I find myself so fortunate to still be able to develop my tax skills in the competition’s virtual format this year. Through my engagement in a variety of workshops and interaction with EY leaders during the programme, I was able to gain a much deeper insight into how digitisation is driving change around the tax function and profession of the future."
For a full list of finalists and their profiles, please see here.
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EY Young Tax Professional of the Year was established by EY in 2010 to foster and nurture the next generation of tax leaders.
This year, 32 finalists from around the world participated in the competition, which has been held virtually due to the COVID-19 pandemic. All competitors are selected by EY member firms in their local market – in collaboration with local universities – before they go on to represent their country in the global final.
Participants engage in a variety of technical workshops, case studies and interviews designed to showcase their knowledge of the international tax, law and people agenda system before a panel of judges including EY leaders, academics and tax directors from major multinational companies.
Since the competition was launched by EY in 2010, more than 40,000 young tax professionals from around the world have participated.
Participants have the opportunity to build their international network, with the winner gaining first-hand experience at EY member firm offices in London, New York and Hong Kong as part of a 30-day world trip – when possible in 2020-21 due to the COVID-19 pandemic.
To learn more about EY’s Young Tax Professional of the Year competition, please go to www.ey.com/ytpy.
