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Australian businesses need to be smarter in the way they handle their tax responsibilities, including the way they outsource some functions, according to EY.
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EY tells business to improve tax functions
23 July 2014
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8 minute read
Releasing the 2014 Corporate Tax Function survey, Margherita Antonelli, EY Oceania global compliance and reporting leader said many businesses are currently using most of their resources dealing with compliance and audit activities, “and these demands will only increase as global compliance requirements become more onerous and audits more common”.
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Given the government’s new limited mandatory disclosure requirements, Ms Antonelli said many organisations will soon offer more complete voluntary explanation of their tax profile to combat misconceptions. This will further drain limited resources, she said.
“With the reality of cost pressures you can’t just keep adding people to your tax function. Our results clearly show that tax leaders need to find a way to get more out of the resources they have”.
“The survey shows that 70 per cent of tax functions are under pressure to reduce their costs”.
“There is no silver bullet but businesses need to get smarter in the way that they outsource some functions, improve their processes, and make better use of technology – particularly data analytics.”
While 88 per cent of survey respondents said they have been audited in the past three years, less than 5 per cent claim to have a good relationship with the revenue authority.
“We see a small percentage of organisations making steps in the right direction. However, those who don’t adapt to the new tax landscape are in real danger of being left behind.”
“It’s only by working smarter and driving efficiencies that businesses can achieve the dual goals of reducing costs and increasing service provision while keeping a tight control on risk management,” Ms Antonelli said.
Other findings from the EY survey include:
• 46.5 per cent of respondents said improved technology/automation could improve their tax function
• 30 per cent do not have formal tax governance procedures and frameworks
• 23 per cent report at board level every month
• Responses indicated a desire to spend less time on compliance work and more time on value adding activities such as risk management and planning
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