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KPMG Survey: Chief Tax Officers Plan to Outsource More Work in Coming Years

S.J. Steinhardt
Published Date:
Feb 1, 2023

A large majority of chief tax officers at multibillion-dollar companies surveyed by KPMG plan to outsource more work to outside providers over the next few years.

The Big Four firm’s fourth annual Chief Tax Officer Outlook Study, asked 300 chief tax officers at large public and private U.S. companies with revenue of $2 billion or more about a variety of topics affecting them. Among the findings is that 83 percent plan to use outsourcing, co-sourcing or managed service alliances in the next three years. The main benefit, as 52 percent saw it, is addressing the problem of attracting and retaining in-house talent.

Chief tax officers use outsourcing for tax areas that demand specialized subject matter expertise, as well as for coping with talent shortages, the survey found.

Forty-nine percent of those surveyed have already begun to use third-party tax technology providers. “With so much data flowing through the tax department, investments in leading-edge technology solutions can be a game-changer, enabling tax functions to reduce manual work and be more efficient and automated in their business processes,” said Brad Brown, a global technology leader and chief information officer for KPMG Tax .

The chief tax officers said that the top three threats to tax organizations are environmental, social and corporate governance (ESG) risk, regulatory risk and geopolitical risk. While fewer than half—47 percent—said that their tax departments are engaged with the business to explore ESG-related risks, 69 percent said that they will be in the next year.

"The change that chief tax officers must grapple with is rapid, relentless and coming from all directions," said Greg Engel, vice chair for tax at KPMG LLP, in a statement reported by Accounting Today. "It makes perfect sense for CTOs to ramp up their interest in outsourcing models given the current economic, regulatory and talent environment. In fact, it's best practice for companies to periodically reassess their need for these models to address changing dynamics in the market and equip themselves with the right resources to compete and succeed."

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