A new survey from Deloitte reveals that tax executives worldwide are navigating increasing pressure from both regulatory changes and digital transformation. With sustainability concerns rapidly rising, 82% of tax professionals anticipate a surge in public tax disclosure requirements over the next two to three years. This reflects a broader shift towards greater transparency, driven by both regulatory mandates and heightened expectations from stakeholders.
“Tax leaders must collaborate across the organization to understand where they are, where they’re going, and how they can get there,” said Amanda Tickel, Deloitte Global Leader of Tax & Legal Policy.
The survey, which polled over 1,100 senior tax and finance professionals across 28 countries, highlights a dual reality in the global tax landscape: a continued emphasis on transparency, combined with growing challenges posed by digitalization and sustainability.
Transparency Still Top Priority
Tax transparency remains the number one concern for tax executives, with 82% expecting increased public disclosures in the near future. National-level transparency laws are identified as the primary driver of this shift, outweighing voluntary disclosures. The rising demand for transparency is being fueled by AI-driven scrutiny of country-by-country reporting (CBCR), urging companies to align their global data and ensure their public tax narratives reflect internal governance strategies.
Digital Transformation: Progress with Caution
The move towards Tax Administration 3.0, where tax is seamlessly integrated into business systems, is progressing, with 86% of executives noting some movement towards this vision. However, confidence in the benefits of artificial intelligence (AI) tools has cooled, with only 29% believing these tools will significantly improve accuracy and even fewer expecting cost reductions. Despite the potential for efficiency, complexities such as e-invoicing are emerging as a new compliance burden, highlighting the paradox in digital tax transformation.
Sustainability’s Growing Impact
Sustainability has surged in importance, now ranking as the third most pressing issue for tax executives. Over half (55%) of respondents now see sustainability, including carbon taxes, ESG reporting, and energy levies, as a major tax concern. Compliance with carbon border adjustment mechanisms (CBAMs), particularly in Europe, is adding to the complexity, with 45% of executives in Africa reporting these costs as significant challenges. Despite the rising importance of sustainability, only 36% of respondents are fully utilizing grants or incentives available to offset ESG investments.
The survey also highlights that 66% of tax executives report a rise in government incentives aimed at attracting skilled, mobile workforces, further reshaping the tax landscape.
In conclusion, Deloitte’s findings signal that tax leaders must prepare for deeper disclosures, more complex digital transformation efforts with uncertain returns, and an increasing focus on sustainability-driven tax changes as they navigate this fast-evolving environment.
