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The world of tax is undergoing a seismic transformation with the rise of AI.
In our last feature on AI in tax, we witnessed how certain tools have already made significant inroads, empowering tax teams to bid farewell to tedious manual tasks and embrace juicier projects. The advent of generative AI, exemplified by disruptors like ChatGPT and GPT-4, has sparked excitement and concerns alike, with some fearing job displacement, while others see the potential for a new era of digital transformation.
As AI continues to reshape tax functions, it will inevitably impact the job market.
Catherine Hall, Head of Tax at Mazars, stresses how crucial adopting AI will be for tax teams in the coming years, stating:
“the skills of tax practitioners must constantly evolve to adapt to the increasing complexity of the global tax landscape, and incorporating AI into their way of working is a natural evolution of that.”
In this second part of our series, we’ll delve deeper into the current market trends and consider the implications AI will have on hiring across the industry.
Current trends in tax recruitment
It’s been well documented that tax compliance professionals are in demand for multiple reasons. And this demand is showing no signs of wavering. But, in recent years, the typical job description for such profiles has seen an increasing presence of skills such as ‘e-invoicing’, ‘automation’, ‘process improvement’, ‘tax engine’, and ‘data’ – most noticeably in the indirect tax space.
What does this mean? Well, as we continue to work through these rapid shifts in technological advancement, the parameters of what we consider to be a ‘good’ profile will evolve – as we are already seeing with tax compliance.
For those in the advisory space, the pace of change is slower. As it stands, AI can be a great tool but it is still providing simplistic tax advice. With that said, however, it provides such advice at an alarmingly fast pace, which can greatly free up time that can then be allocated to more complex projects.
A notable tax hiring trend we have been seeing is the identification of individuals who are capable of effectively integrating AI solutions into tax processes, thus ensuring compliance and leveraging AI-driven insights for strategic decision-making. Furthermore, it’s a given that expertise in data analysis, machine learning, and tax technology will continue to be in high demand.
The gap between tax and tax technology is getting closer, and AI is only speeding up this process. With so much going on in tax technology, it’s become a fascinating (albeit exhausting) sector of the tax market to follow. Russell Gammon, Chief Solutions Officer at TaxSystems told Harvey John that,
“In the job market, we’ve already seen a large increase in tax technology roles over the last few years. That is only set to increase as generative AI not only makes its way into existing tax technology products, but also creates new standalone offerings. We’re seeing this space move at a lightning pace, so I’d expect to see the products hitting the market sooner than we might traditionally think.”
Tax technology roles have been rising steadily across the UK & EMEA regions over the last decade as documented recently by Innovate Tax. This is likely to keep rising, and AI savviness will play a crucial role in hiring for these roles
It’s important to note, however, that some tax disciplines will always be more adaptive to such changes than others. Transfer pricing, for instance, is a specific area of tax which can hugely benefit from AI language tools due to its heavy reliance on text analysis and interpretation. Borys Ulanenko who recently launched ArmsLength.AI (a company that pioneers an AI-driven platform exclusively built for transfer pricing professionals) notes,
“…a significant chunk of TP professionals are beginning to use AI tools, but there remain concerns primarily revolving around data accuracy, reliability, and security.” So it is likely that AI skill sets will rise in prominence in this domain in the near future. “
What does this mean for the future of tax education & training?
At some point, AI will redefine tax roles as we know them and, as a result, education and training for tax professionals will also need to adapt.
But what these changes will look like remains a mystery. The main concern is how junior tax advisors will gain expertise without traditional hands-on experience.
The exact nature of these transformative changes remains uncertain but we are already starting to see new initiatives that foster learning around the digitisation of tax. The introduction of a new diploma in Tax Technology by the Chartered Institute of Taxation in November 2022 signals a positive step. This diploma is expected to equip tax professionals with essential skills to work within the tax technology space. Equally, some of the Dutch universities have done a good job at featuring tax technology on their syllabus, for instance Maastricht University.
But changes in the learning and development arena won’t happen overnight.
Leading Tax Technology & Transformation Realization Specialist at Xyto, Geoff Peck, has been involved in shaping the curriculum of the LL.M. Digitalization & Tax Law program run by the Executive Academy at the University of Vienna (WU), now in its third year. When we asked whether AI has made its way onto the syllabus, we were told that: “AI sessions are just exploratory right now. It is not core yet, although I know they are looking at ways to incorporate it.”
Before we are likely to see any notable changes in the curriculum, the role of AI in tax still needs more clarity and, as Peck continued to tell us, to overcome the significant challenges it faces in terms of cost, trust, false positives, fallibility, and narrow applicability. According to Peck, “impact is likely to remain incremental for now in areas like:
- Clustering techniques to classify large inventory masters for tax
- Enhanced search through natural language processing – a.k.a. ChatGPT
- Query writing for standard relational data models like SAP and Oracle.”
Ultimately, it’s taken considerable time for tax technology alone to feature on the syllabus for course material, and even yet, it’s not as much as many would like to see. So we are likely a fair way off from witnessing the presence of AI in the educational space for tax.
AI is transforming almost every industry globally.
For now, we can expect to see more and more tax professions leaning into AI tools to make their jobs easier but the true extent to which they are able to do that is still unclear.
The collaboration between humans and AI will consistently surpass the capabilities of either humans or AI in isolation. Equally, AI alone will not replace jobs; rather, it is the synergy between humans and AI that will drive the most significant advancements. Some argue that AI is only as powerful as the human operating it, and in the next 5 years, we’ll wonder how we ever coped without it.
As Russell Gammon told us,
“Like when the internet first came around, it took a while for it to become apparent where, how, and when it would really make an impact. AI will follow the same pattern; a decade from now it’ll be commonplace and we’ll wonder how we ever made it without it.”
To remain relevant and competitive, tax professionals must embrace AI’s transformative technology. The industry’s future will be shaped by early adopters and pioneers leveraging AI’s potential.
Through coordinated research and content marketing, Katie’s goal is to ensure that our team continues to evolve with the everchanging tax landscape and our network benefits from the unique perspective we have of the market.
In doing so, Katie's role is fundamental in championing Harvey John's values of bringing clarity and expertise to tax recruitment.