A review into the future of the tax profession
In June, the Inspector-General of Taxation, Ali Noroozi, announced the terms of reference for a review that will examine the future of the tax profession.
Mr Noroozi acknowledged that the profession has experienced significant change and expects the rate of this change to accelerate in the future.
“Importantly, the profession is not alone as this change is driven by a global phenomenon,” Mr Noroozi said. “‘Digital disruption’ or digital technology through advancements such as artificial intelligence and robotics is changing the very fabric of our society — the way we work, communicate, do business and manage our social interactions.
“The Australian tax system, its administrators, taxpayers and tax professionals alike will need to rise to this challenge and respond to it. The Commissioner and the profession both requested and support this review.”
A key objective of the review is to raise awareness about the risks, challenges and opportunities presented by technological, social, policy and regulatory changes. It will focus on all aspects of the tax profession, as well as issues for the administrators and regulators.
The Tax Institute will make a detailed submission.
At this stage, we probably have more questions than answers, but one thing we are certain about is that a highly skilled tax profession with impeccable ethical and professional standards is an essential part of the integrity and sustainability of a healthy tax system. Tax professionals play a critical role in this system, particularly given its complexity.
Some of the key issues we’re exploring include:
• technological disruption
• the tax skills required in the future
• the tax function of the future
• career development for tax professionals.
Technological disruptionTechnology is disrupting many professions and areas of business. Tax is just one of them. In tax, it’s pretty clear that technological disruption will significantly impact compliance work and that the work of the future will be in the higher value advisory space.
I have no doubt that the Inspector-General’s review will include a focus on the impact of technology (particularly ATO technology) on practitioners, but it needs to reach further than this and also unpack the impact of other issues.
Tax skillsWith regard to the future of tax work — and what machines might and might not do — the 2017 PwC 20th CEO survey results suggest that the hardest skills to find are those that can’t be performed by machines. 77% of CEOs agree that it is at least difficult or somewhat difficult to find and recruit people who have creativity and skills in innovation.
The tax functionThe Tax Institute is keen to explore and understand what the tax function of the future might look like. What work will be performed by the in-house tax function and its advisers? Who will do this work and what skills will they need to acquire? Importantly, how will young tax professionals learn the basics that were previously acquired by performing the compliance tasks that will now be automated by technology?
It’s clear that tax technologists and data analysts will play an important specialist role in the tax function of the future, but I suspect that all tax professionals will need greater skills and expertise in technology and data analytics.
Career developmentAt our 2016 National Convention, Bernard Salt, the well-known demographer at KPMG, highlighted significant demographic changes impacting the professions. He referred to the millennials’ trend of having multiples careers, very unlike the baby boomers who typically chose one career and stuck with it. What does it mean for the tax profession if we see the tax professionals’ careers becoming shorter? This certainly has significant implications for succession planning in public practice.
The ATO’s involvement is crucialI especially applaud the role of the Commissioner of Taxation, Chris Jordon, in supporting the Inspector-General’s review.
When the terms of reference were announced, Mr Jordon said “tax professionals play an essential role in our tax system. We continue to work with the profession and other intermediaries on how we can embrace upcoming changes for the benefit of the whole community”.
I have no doubt that the review will provide a roadmap for tax professionals, offering strategies that will help them embrace the opportunities that digital technology, in particular, will generate in the years to come.
What do you think? Please send us your feedback. We’d love to include the perspectives of our members in our submission to the review.
* Noel Rowland is The Tax Institute’s Chief Executive Officer. This article first appeared in the August issue of the Institute’s member-only Taxation in Australia journal.