EY Survey Reveals AI’s Growing Role in Tax: Finance Teams Brace for Compliance and Talent Challenges
Generative AI (GenAI) is emerging as a key tool for tax and finance operations, according to the latest EY 2024 Tax and Finance Operations Survey. As businesses grapple with complex tax compliance requirements, talent shortages, and rising cost pressures, AI offers transformative solutions to streamline operations and reduce human errors.
1. AI in Automating Tax Compliance
Tax departments are increasingly adopting real-time digital tax filings, driven by government mandates like e-invoicing. More than 80 countries have implemented e-invoicing regulations, with more expected to follow by 2027. GenAI plays a crucial role in automating these tasks, helping businesses ensure compliance while reducing costly errors and manual processes. By cross-referencing jurisdiction-specific tax laws, AI can quickly identify deductions and credits, streamlining tax return filings.
Photo by Tim Gouw
2. AI Solving the Global Talent Shortage
The global talent shortage is another key challenge. According to the EY survey, 53% of tax departments struggle to attract and retain qualified staff. As experienced professionals retire and fewer graduates enter the tax profession, AI helps by automating routine tasks like reconciliation, freeing up existing talent to focus on higher-value strategic work. Generative AI also offers the ability to attract and engage talent by making tax roles more dynamic and less monotonous.
Moreover, 62% of companies say they are willing to hire employees without traditional university degrees, leveraging AI to perform the more technical aspects of tax and finance.
3. Cost Pressures Push Co-Sourcing
EY’s survey reveals that shrinking budgets are forcing tax departments to consider co-sourcing. Over the next two years, tax budgets are expected to decrease by 3.3%, driving more companies to outsource compliance and reporting tasks. Using external providers equipped with AI-driven solutions allows businesses to manage global tax reforms more effectively while keeping costs down. AI’s ability to automate compliance-related work means companies can achieve significant savings without sacrificing accuracy or speed.
4. The Strategic Role of AI in Future Planning
Photo by Kelly Sikkema
As GenAI continues to evolve, tax departments are shifting from viewing it as a tool for automating tasks to integrating it into their broader strategy. AI in tax operations is becoming crucial for staying competitive, especially in light of global tax reforms and increased demand for data transparency.
Companies that integrate AI effectively into their operations will be better prepared for the future, from navigating tax regulations to improving data-driven decision-making.
The 2024 EY survey highlights that companies embracing Generative AI are better equipped to tackle tax compliance challenges, reduce costs, and close the talent gap. As governments demand more real-time reporting, and the workforce landscape shifts, those who leverage AI strategically will gain a competitive advantage in an increasingly complex tax environment.
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