How tax professionals can prepare for the storm ahead

For those industry professionals toiling away with current, new and proposed tax laws, every now and again — when you raise your head from the never-ending updates — you may see signs of change… unsettling change. Yes, no doubt about it, with an avalanche of disruptors, digital start-ups, and the sharing economy radically changing the taxation landscape, there’s certainly a storm of confrontation ahead. And if you don’t batten down and prepare for change in the commercial weather, you’ll be washed aside just like other has-been businesses. 

In five years’ time, will anyone remember what a video store was?

Just like vanishing record shops and book stores as well as industries that are currently in the eye of their own storm — such as the taxi, transport and accommodation sectors — the commercial world as we know it, will only be survived by those that prepare themselves.

Whether they disappear or not, the average tax professional could do well to ponder when they too will be affected by industry change?

More recently, technological change or advancement and the evidence of how it will affect the taxation industry, was witnessed with the replacement of eTax by the Standard Business Reporting (SBR) platform, myTax.

In a 2014 address to The Accountant’s Technology Showcase Australia, the then Second Commissioner, Geoff Leeper, predicted that the ATO’s introduction of SBR would result in a significant loss of processing and compliance work for many accounting firms — estimated at approx $500m.

This should not to be misunderstood as a move by the ATO to limit the business activities of tax professionals, rather it appears as just another aspect of technology simplifying things; along the lines of, say, how the introduction of electricity gave the candle makers of their day a shiver down the spine.

So, with change in the wind and blowing out more than candles, what other aspects can tax professionals expect to face?

Is your cyber office as secure as the rest of your premises?

As your office ramps up their tech capacity to deal with an ever-expanding digital world, so too are the bad guys. However, it’s not just the shady character on the wrong side of the tracks trying to break into your cyber office, it’s the multitude of worldwide digital specialists that will attack you with ransomware and malware.

It’s easy to understand SMEs considering a partnership with like-sized firms, or an amalgamation into a larger organisation, simply to access the fiscal firepower to set up a digital defence. However, what advice do you have to determine if this is the appropriate move? Could your phone now ring just as much in the middle of the night with new-partner issues?

How can you afford to employ new staff when there’s not much ‘beginner work’ for them to do?

Like most businesses, new recruits generally start on the basics and work their way up. But will there be that much ‘beginner’ type of work around the office in the future? The growing concern is that with tax advice apps, professor Google, and do-it-yourself software, a large chunk of the ‘basic’ workload will become less frequent as your client goes DIY.

With mitigating opportunities for ‘newbies’ to pay their way, the concern is of a future where there is a limited supply of new talent coming through, and therefore attain expertise in the taxation field. 

Whoever it was that created the old saying: ‘Change is as good as a holiday’, didn’t really consult a tax professional. With the world becoming smaller, trade and commercial engagement becoming bigger as well as ecommerce booming, the normal pace of adjusting taxation law has accelerated — creating industry fatigue.

So, with no sign of things slowing down in the future, where does one go to get some direction?

Change is coming faster than expected

In one of his last public appearances, the late Professor Stephen Hawking spoke at the opening of the Leverhulme Centre for the Future of Intelligence (LCFI) at Cambridge University. He warned that the creation of powerful artificial intelligence would be, “…either the best, or the worst thing, ever to happen to humanity”.

Indeed, the advent of self-driving vehicles and increasing usage of drones to deliver parcels may eventually lead to the end of the transportation and logistics industry as we know it.

December 2016 saw Amazon trial its first drone parcel delivery in Cambridge, UK, bringing Jeff Bezos’ dream of having a fleet of drones delivering parcels globally one step closer to reality.

Shortly before, Just Eat delivered its first takeaway order with a delivery robot in Greenwich, UK. While in neighbouring NZ, Domino’s Pizza delivered their first pizza by drone to a customer north of Auckland.

So, how does pizza and trucks affect tax advice?

Sure, we may not see a future encompassing drone-delivered tax advice, however in a different format their will be just as much disruption coming over the horizon towards the accounting, legal and tax professions. In fact, this disruption has already commenced.

Ross Intelligence (ROSS) is an AI platform built on IBM Watson to aid US law firms in respect of legal research in the bankruptcy field. ROSS has been designed to understand natural language questions, provide answers to these questions, formulate hypotheses and monitor developments in the legal system in real time. When asked a question in plain English, ROSS trawls through the entire body of law, collects evidence from which it draws inferences and returns with highly targeted evidence-based answers. Did you spot the word: entire?



Looks like the rain has started… and it will only get heavier

Meanwhile, here in Australia, an Adelaide-based law firm, Cartland Law, has created Ailira (Artificially Intelligent Legal Information Research Assistant). Ailira is a machine learning platform that similarly accepts natural language questions, searches an array of unstructured text and provides evidence-based answers.

What makes the storm seem closer, is that Ailira is targeted at Australian tax law, rather than ROSS with US bankruptcy law. It would appear inevitable change moves closer every financial quarter.

In which case, it doesn’t really matter if you’re a weatherman, an SES worker or a scoutmaster, there’s one main word to remember when a storm strikes: prepare!

Fortunately, The Tax Institute is at the forefront of the change agenda and is involved in many forums, including The Future of The Tax Profession Working Group with the ATO and other professional bodies.

The Tax Institute is dedicated to anticipating the needs of the future professional. Our  mission is to help shape the tax profession of the future while meeting the needs of our members and the wider tax community as we transition to that future — no matter how threatening the storm.

To find out more about our education program and professional development subjects, visit our website.

Make sure you’re prepared for the storm.

Popular posts from this blog

July's tax developments - in depth

How the tax profession can stay relevant

SMSFs and the state of play post-2017's reforms