Future-ready tax practitioners will need to learn data management to become effective advisors.
This is according to Ettiene Retief, chairman of the National Tax and SARS Committee at the South African Institute of Professional Accountants (SAIPA), addressing SAIPA’s 2020 Accounting iNdaba.
He says that, as the Fourth Industrial Revolution (4IR) sets in, tax compliance processes are becoming highly automated. So tax practitioners will increasingly be called on by their clients to provide advisory services instead.
“It is essential that they understand how to manage data and extract value from it,” he says.
Tax administration used to be a complex, manual and time-consuming process. To ensure they were compliant, organisations and individuals employed the services of tax specialists.
Now, 4IR technologies, like artificial intelligence (AI), big data and mobile computing, are enabling SARS to automate its assessment and auditing services more and more. For example, the tax authority can now carry out auto assessments on certain taxpayers based on third-party data without them having to submit a return at all.
As the demand for their administrative services falls, tax practitioners should begin focusing on services like compliance and risk management, and advisory services.
Value of data
Over time the amount of data taxpayers are expected to retain and its retention period have increased significantly.
Tax advisors who understand how to work with data and use it to provide their clients with valuable insights will be more in demand.
“This means learning to improve data quality, processing efficiencies, and data analytics,” says Retief.
Retief says that tax practitioners should take the following steps to ensure they are prepared.
First, they must understand the limits of their client’s accounting systems and supporting documents. “They will add value by identifying bottlenecks in the compliance process, like weak VAT reporting or manually transcribing information from source documents,” he says.
Second, they should identify ways to enable automation within their practice and in processing their client’s data. “Use technology to reduce manual processing, minimize human error and speed up submissions to the client’s benefit,” says Retief.
Third, they must invest in upskilling themselves in technology and process design competencies. “Having this knowledge will allow them to design more efficient and informative tax management processes.”
Fourth, they must understand how tax and accounting departments can leverage data management to improve processes and outcomes. “This includes ensuring data is clean and formatted to enable reporting,” he says.
Fifth, they should know how to identify and mitigate risk in relation to data protection. “It is critical to understand topics like cybersecurity and data governance as these can save clients from legal pitfalls.”
As tax administration becomes increasingly automated, tax practitioners will focus more on advisory services. Those who learn to leverage data to their client’s advantage will be in greater demand.
“They must become competent in data management and automation if they want to remain relevant,” Retief says.