Tax apps have generated much excitement around their potential and impact on the tax return Australia industry. But what are some of the potential future trends in this space?
The future is AI, big data and the cloud. These technologies can assist businesses and government authorities streamline their processes while remaining compliant with new regulations.
1. Artificial Intelligence (AI)
Artificial Intelligence (AI) holds the potential to revolutionize tax administration. It could enhance efficiency, save time and reduce expenses.
AI can also assist businesses stay abreast of regulatory requirements, ensuring their tax processes and reports meet these demands. For instance, one AI solution is helping companies classify products and services according to their taxability.
This tax return online process is crucial, as there are thousands of sales and use tax jurisdictions around the world, each with its own regulations.
Document intelligence provides automated retrieval and classification of key facts from invoices at speed, accuracy and scale. This streamlined process improves accuracy while decreasing human error.
2. Big Data
The tax industry is rapidly transitioning into one where data and analytics are central elements. To effectively utilize this information, it’s essential to comprehend its use and how it can be leveraged for efficiency gains, improved customer experiences, and compliance initiatives.
Big data is an incredibly useful source of information that can help you anticipate potential tax audit risks and address them before they become major issues. Furthermore, it gives you greater insights into your client’s needs, ultimately improving the quality of your service delivery.
The big data revolution is revolutionizing how organizations make decisions, but it also presents significant obstacles. To avoid these pitfalls, organizations must adopt a contextual decision intelligence capability. This strategy helps maximize your data’s value and efficiently deploy AI using high quality and explainable models.
3. Artificial Intelligence (AI) for Taxes
AI technology can assist tax teams in quickly and accurately processing thousands of invoices. It automatically detects key tax information in documents, then classes them according to machine learning algorithms.
This helps save time and eliminate errors from tax calculations.
To maximize the potential of AI, tax teams must first streamline data processes and guarantee their data is ready for machine learning.
The EY 2020 Global Tax Technology and Transformation Survey reveals that tax teams spend 40-70% of their time collecting and manipulating data, when this could be accomplished in a fraction of the time through AI.
Furthermore, AI can be utilized by tax professionals for planning ahead. For instance, they could identify how regulatory law and company performance influence a business’ finances.
4. Artificial Intelligence (AI) for Compliance
AI and machine learning technology can help reduce risk, enhance value, and create a cost-effective approach to tax reporting. By employing machine learning algorithms that identify and classify business expenses, AI could automate what once an intensive process was requiring multiple experienced professionals’ time and effort.
AI can also enhance tax calculations’ precision. For instance, it can classify transactions according to their taxability and match products and services with their appropriate tax category.
However, it’s essential to remember that AI is still far from replacing human tax advisors.
One major reason is the slowdown in hardware advancements. Furthermore, many remain sceptical about AI’s capacity to excel in real world scenarios.
5. Big Data for Taxes
Big Data is an invaluable analytical resource that is helping tax authorities better manage their data. This ensures that taxpayers pay the correct amount of tax and that governments collect enough revenue to finance public goods and services.
Big Data also assists the IRS in being more accurate when it comes to detecting fraud and tax evasion. Many countries are already utilizing Big Data for monitoring tax compliance.
The explosion of digital commerce is creating a flood of new data that is revolutionizing the taxation system. This includes transactions from electronic cash registers, mobile payment providers and other digital sources.