Unless you’ve been living under a rock, you’ll have noticed that global tax issues are taking their fair share of news headlines these days. Whether the media are speculating on 'tax avoidance' (the legal use of tax laws to reduce one's taxes) or 'tax evasion' (a term used in a criminal context to reflect the illegal misrepresentation of taxable income), tax always makes a grabbing headline.
Whether it’s on a local or international scale, tax is thoroughly on the agenda of our news tablets. The big question is how taxes will change as we recover from the economic impact of Covid-19. Should economies be stimulated or will governments try and claw back the money they spent keeping businesses from going to the wall?
Sifting through these headlines, many of today’s tax affairs make a compelling (and quite attractive) case for why the graduate or trainee accountant of today might seriously consider delving down the specialist ‘indirect tax’ path as opposed to the traditional 360 degree tax positions or the popular routes of corporate tax.
For such job seekers (or future job seekers), it’s therefore certainly worth paying attention to the global rise of indirect tax.
The rise of indirect tax
One of the ongoing commentaries amongst tax professionals and economists over the last couple of years has been focused on the shift from direct taxes to indirect taxes.
The OECD's most recent figures indicates that corporate tax revenues have continued to fall since the global economic crisis, whilst VAT revenues climb. By 2014, VAT revenue had reached 20.1% of total tax revenue and it’s speculated that this trend will continue due to the various changes taking place in the global tax market.
Many major economies, for instance, are now introducing Customs & Excise duties and a value-added taxation. We’ve seen a significant step forward in the journey of VAT implementation across the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE). We recently interviewed a KPMG partner in Bahrain asking what it’s like to be a tax expert in a land which used to have virtually no tax!
On the peripherals of all this global indirect tax activity, let’s not forget about the ever-growing demand for tax technology which is playing a huge role in reinventing the indirect tax market! This alone is fuelling interesting debates and having a huge impact on tax recruitment demands.
What does this mean for your career?
Whether it’s through legislation or the push for digitisation, the global tax industry is evolving and reinventing itself at a rapid pace. In fact, there’s probably been more changes in the last 5 years of tax than there has in the last 30 years!
From a recruitment perspective, you should be thinking about this.
The apparent shift from CIT to indirect tax makes a compelling case for why the graduate of today should seriously consider a career in this arena. Here’s why:
This is just a sample of - what I feel - are the key reasons why the indirect tax profession makes an extremely viable and attractive route for the graduate or trainee accountant of today. But, if I could stress one point out of the above, it would be the prospect of developing that mile deep, inch wide knowledge in an increasingly important market. Now seems like an excellent time to seriously be thinking about an indirect tax career.
However, whilst my opinions may shed some light on the attractiveness of an indirect tax career, there’s certainly more value in hearing the opinions of those who have taken this journey themselves.
For the Part 2 of this article, I have interviewed Daniela Alexandru (Senior Services Delivery Manager, TMF Group) and we discussed her experiences with beginning a career in indirect tax and what trainees in the field should be thinking about today.
Alex Mann is an Director in the Tax Division at Harvey John.
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