A survey carried out by Thomson Reuters has revealed that businesses are investing significant amounts in new tax technology, such as Making Tax Digital (MTD) software.
The survey, which was put to 438 tax teams, revealed that 98% of respondents intend to invest in tax technology in the next 12 months. 28% intend to increase their spending on technology, whilst 38% expect spending to remain at its 2018 level.
Many firms reported that their decision to increase spending on tax technology was driven by the introduction of such initiatives as the automatic exchange of tax data, and Making Tax Digital for VAT (MTD for VAT).
'This interest in new technologies indicates that tax departments are recognising that the deployment of tax technology can help increase efficiencies, reduce human error and deliver a consistent and manageable way of addressing . . . new tax regulations,' said Steve Smith, Proposition Lead for Corporates at Thomson Reuters.
'Compliance is in the midst of a revolution, and looking forward we can expect to see more regulatory attention to the process and governance, rather than the end number. In a digital world, the tax authorities will easily be able to validate the output. Tax teams need to prepare for this shift now.'