KPMG LLP Survey: Only One-Third of C-suite Execs Use Data to Prepare for U.S. And Global Tax Changes

Findings from 300 C-suite execs show disparity between perceptions and reality of composition of tax departments

C-suite perspectives on the tax function.

  • Majority say predictive power of tax data can add value to financial direction of organization
  • More than ¾ say emerging tech in tax is like “wild, wild west”
  • More than half not using tax data to align with ESG commitments


With the prospect of significant U.S. tax changes and a global tax system overhaul on the horizon, a mere 31 percent of C-suite leaders (majority of whom are CFOs and CEOs, but also Chief Tax Officers) are using their organization’s tax data to model and scenario plan the tax and financial ramifications of looming legislative changes, according to a new report from KPMG LLP that examines the modernization and current state of tax departments in corporate America.

The KPMG report “Tax Reimagined 2021: Perspectives from the C-suite” features insights from 300 C-suite executives at organizations with more than $1 billion in revenue. The findings indicate that while a significant number of leaders identify their tax departments as modern or innovative – and a large number believe in the predictive power of tax data to add value, anticipate changes, and gain competitive advantage – many are hesitant to take action by investing in tax technology tools and emerging tech, hiring new talent, and upskilling current employees in order to truly “walk the talk.” A related challenge is the heightened competitiveness for top talent with tax, tech and strategy skills shaping a new, reimagined tax professional.

Follow the conversation on Twitter @KPMGUS_Tax, #KPMGTaxReImagined.


KEY FINDINGS

Tax’s seat at the table

  • Eighty-nine percent say their company’s tax function has a seat at the leadership table
  • Seventy-six percent say that the predictive power of the tax function has the potential to impact the financial direction of the entire organization
  • Seventy-three percent admit their organization doesn’t know how to use tax data in a forward-looking way, and less than a third (29 percent) say they regularly use tax data to inform overall business strategy and planning
  • Thirty-five percent describe their organization’s tax function as strategic


Investment in technology

  • Seventy-six percent agree that the emerging tax technology landscape is like “the wild, wild west”
  • Although 80 percent of C-suite leaders say they want to invest more in tax technology, just 36 percent say they are investing “a lot” in technology to advance their tax departments
  • Nearly half (49 percent) of respondents cited uncertain ROI as a barrier to investing more in tax technology
  • Nearly two thirds (65 percent) say they have become more willing to outsource or co-source over the past year, with 61 percent saying that better technology capabilities are a factor in that decision


Tax policy

  • Seventy-five percent are prepping for potential U.S. tax changes, yet only 31 percent are using tax data and technology for scenario planning around tax changes
  • Half of C-suite leaders say global tax reform keeps them up at night
  • Half of leaders say an increase to the GILTI rate keeps them up night, while only 37 percent say the same about the potential increase to the U.S. corporate tax rate


The intersection of tax and ESG

  • Eighty-five percent of leaders are prioritizing refining and making their tax policy/strategy publicly available
  • Seventy-seven percent agree that investor interest in ESG is driving the topic onto the agenda for their company’s tax department
  • More than half (55 percent) are not currently using their organization’s tax data to align with ESG priorities


The tax professional of the future

  • Eighty-two percent of C-suite leaders say it’s hard to hire good tax talent
  • Seventy-six percent of leaders say their tax talent lacks the right mix of skills needed to be successful, yet just 36 percent say they are upskilling current employees within their organizations
  • More than half (59 percent) of C-suite leaders seek tax professionals who can learn tech, but a significant minority (41 percent) want to hire technologists who can learn tax


LEADER QUOTES:

“Tax is front and center on the agenda for many C-suites, but the combination of the prospect for another round of U.S. legislative tax changes, the OECD global tax agreement and the rising pressure for executives to consider ESG in their total tax stories has left many leaders wondering how to prepare,” said Greg Engel (@Greg_Engel_KPMG), Vice Chair – Tax, KPMG LLP. “The challenge with modeling these potential changes is that there’s still much uncertainty and many layers of complexity to consider. An organization needs detailed data on both what exists today and what could exist tomorrow in order to successfully navigate the future to drive growth – and that can be a tall order.”

“The tax profession is undergoing a tremendous shift in the talent landscape, which is being driven by disruption from many fronts,” said Rema Serafi (@RemaSerafi), National Managing Partner – Tax, KPMG LLP. “Future-ready tax functions require teams that can use data to meet their organization’s immediate needs and strategically consider what this data means for the organization’s future growth.”

“An organization’s data is both vast and complex and, in order to generate real value, the right technology, resources and communication among leaders across the organization are critical,” said Brad Brown, Chief Technology Officer – Tax, KPMG LLP. “More and more C-suite executives are turning to outsourcing or co-sourcing their tax functions as a way to cope with the ‘wild, wild west’ of technology tools that exist, a trend that’s significantly risen amid the COVID-19 pandemic and likely to continue over the next three years.”


About the Survey:

The findings in “Tax Reimagined 2021: Perspectives from the C-suite” are based on results from an online survey of 300 C-suite executives at companies with at least $1 billion in annual revenue who make or influence corporate tax-related decisions at their organizations. The survey was fielded between July 20, 2021, and August 6, 2021.

About KPMG LLP

KPMG US LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing audit, tax and advisory services. The KPMG global network operates in 146 countries and territories and has close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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Contact

Matthew Weiss
KPMG LLP
Tel: 201-307-8138
Twitter: @MatthewMWeiss