Deloitte has officially published its 2024 Global Tax Policy Survey, which analyzed responses of more than 1,000 tax and finance executives within the Forbes 2000 multinational organizations. Given the size of it, the survey represented wide-ranging industries, organization sizes, and geographies so to understand how they are handling the immense changes in the global tax landscape. Talk about what all was revealed during the stated research, we begin from how ever-increasing demands for tax reporting have pushed transparency and reporting up as top priority. To give you a more concrete picture, seven out of 10 residents were found expecting their public tax transparency disclosures to increase in the coming years, due in part to new public country-by-country reporting (PCbCR) requirements. Furthermore, an estimated 37% participants claimed that the increased disclosures will entail new types of information they don’t currently report. Joining the same was a contingent of 79% respondents who revealed that they may face potential effects of transparency demand emerging from the climate and sustainability field. Along the same lines, even though 97% participants were adjudged have a tax transparency strategy in place, these people also seemed to face challenges in executing it, with their challenges ranging from providing relevant data, to governance and data risks, and understanding the applicable rules.
Another trend that Deloitte’s latest report would reveal was digitalization of tax flagged as a key priority. Here, we would see movement to Tax Administration 3.0, a digitalized model which includes enhanced compliance with fewer resources. More on the same would reveal how nine in 10 respondents reported at least some progress in their country with this model, with benefits being improved customer service (42%), a more collaborative relationship with tax authorities (37%), and fewer and more efficient tax audits (36%). Having said that, some respondents did retain concerns in regards to increased costs and complexity of digitalization, as they demonstrated the importance for governments to provide more clarity on what the concept entails and the long-term business benefits. Moving on, the survey in question also deemed Artificial Intelligence (AI) and Generative AI as an increasingly important factor in the tax world. This became evident when 62% of respondents said that they expect AI to be widely used in tax compliance over the next three years, but again despite that being the case, 40% participants remain optimistic about tax compliance still involving significant human oversight.
Hold on, there is more, considering we haven’t mentioned the report’s take on international tax reform, which continues to stay dominated by the OECD two-pillar approach. Here, 45% respondents said that the given approach is likely to make corporate tax rulescomplex through more detailed reporting requirements and disclosures, while on the other hand 38% believe it will make them fundamentally simpler as some of the existing laws may be repealed due to post-Pillar Two decluttering.
Then, there were three-fourths of respondents who rated corporate tax implications of international remote working as the highest regulatory concern (75%). This was followed by other concerns like employee tax (65%) and social security taxes (65%). Rounding up highlights would be the impact of climate goals on wider tax function. You see, 83% respondents see ESG initiatives impacting their tax function in some regard or the other. To expand upon that, 83% expect the greatest impact to come from taxes on energy consumption, with a third expecting only a minor impact from taxes on waste and pollution.
“If we are going to rise to the challenges of the fast-changing tax environment we need to understand how businesses are actually responding. Deloitte’s 2024 Global Tax Policy Survey gives us invaluable insight into how the major tax policy themes are playing out in the real world,” said Willem Blom, Deloitte Global Leader. “Our task now is to work with organizations on a global scale to shape effective responses.
