Tax leaders optimistic about GenAI despite cost concerns

Tax professionals and CFOs are increasingly optimistic about the role of generative AI (GenAI) in enhancing efficiency and effectiveness within tax and finance operations, according to the latest EY survey.

EY's 2024 Tax and Finance Operations Survey garnered responses from over 1,600 CFOs and tax professionals spanning 32 jurisdictions and 18 industries worldwide. The survey highlighted significant confidence in the transformative potential of GenAI, with 87% of the surveyed professionals expressing optimism about its ability to drive efficiency—an increase from 15% the previous year. Despite this optimism, a substantial 75% acknowledge that they are still in the preliminary stages of integrating GenAI into their workflows.

Marna Ricker, EY Global Vice Chair – Tax, commented on the findings: "GenAI is already revolutionising the tax and finance industry by helping manage complex reporting tasks and large amounts of data. It's empowering tax professionals to have a transformative mindset, allowing them to be more efficient, focus on more strategic tasks and make better decisions. This will, in turn, unlock value for their organisations. While the survey indicates that many leaders are still grappling with how best to take advantage of the technology, now is the time to future-proof the tax function by developing a plan to integrate GenAI responsibly and with confidence."

Cost pressures have emerged as a primary concern for these functions for the first time in the survey's history. Cost-cutting measures and inflation are notably impacting budgets, with 86% of respondents looking to reduce costs. Nearly half of the respondents have prioritised effective budget management.

Regulatory and reporting demands have intensified the pressure to transform data and technology systems. The need to manage data-heavy tax obligations—such as real-time digital tax filings and e-invoicing, expected to be mandatory in close to 100 countries—is pronounced. Compliance with OECD recommendations, including the global minimum tax rate stipulated by the BEPS 2.0 project, also necessitates adjustments in tax reporting procedures. Dave Helmer, EY Global Tax and Finance Operate Leader, noted, "Mounting regulatory and reporting pressures continue to be a strain for tax and finance functions, and businesses are struggling to put the right data and technology in place to address these challenges. Data re-use and intelligent agents are a powerful solution to make that and much more happen."

The talent deficit is another pressing issue, with 70% of leaders acknowledging the impact of fewer accountants entering the profession as older cohorts retire. More than half reported difficulties in attracting and retaining suitable talent. The survey indicates a growing recognition of the value of non-degree holders, with 62% of respondents regarding them as a crucial talent pool.

Helmer further elaborated on the talent issue: "The talent gap has reached crisis proportions. Employees are being called on to do more with less, but businesses also want tax professionals to spend twice as much time on strategic tasks than they do on routine work. To facilitate this, many businesses are looking to co-source as a solution, particularly with the budget constraints and the need to invest in technology and GenAI."

The survey found that over half of the respondents believe GenAI will not reduce headcount in tax departments. Instead, it is expected to shift employees' focus towards strategic, higher-value tasks, moving away from routine compliance obligations.