KPMG survey: how are tax departments in CR keeping up with digitisation?
A recent KPMG survey shows that tax departments in companies in the Czech Republic are generally satisfied with the management of their tax agenda, but there are still some gaps in the implementation of new technologies; e.g., only 8% of respondents have implemented robotic process automation. In addition to asking finance and tax managers about their satisfaction with the management of the tax agenda, we also inquired about the technology used and the degree of digitisation of individual processes. We have conducted the survey as part of our Tax Technology & Transformation initiative, which helps companies to modernise and digitise their tax processes.
The survey involved over sixty companies and corporate groups, 55% of which were large businesses with more than 500 employees. The results show that the majority of respondents are quite satisfied or very satisfied with their company's tax agenda management. In contrast, only 16% of companies expressed dissatisfaction. For their tax agenda management, three-fifths combine in-house tax specialists and external advisors, one-fifth rely exclusively on internal resources, and the last fifth depends entirely on external advisors.
MS Excel rules technology
When it comes to technology, it's no exaggeration to say: “Excel is the king.” Although technology in tax administration is rapidly evolving, Excel tools and spreadsheets are used as at least one of the technologies by over 83% of respondents. Of the ERP (enterprise resource planning) systems, SAP dominates (34%). A quarter of the companies surveyed use other applications or in-house software. Other tools such as Power BI, Microsoft Dynamics 365, or Microsoft Azure are also used in tax departments. Robotic process automation is used by only 8% of respondents.
Areas where technology leads and lags behind
The leader in automation is the VAT area - preparation of VAT ledger statements and tax returns (both over 60%), and the payroll agenda is also performing well. In contrast, the most manual work is required for current and deferred income tax calculations, keeping records of fixed assets, and transfer pricing. Invoice processing and accounting somewhat polarised our respondents - it took the imaginary bronze position both in the most automated processes and in the most manually performed processes.
Digitisation as an opportunity
KPMG's survey shows that directors and managers of tax departments recognise that innovation helps to make tax agenda management much more efficient and use a wide range of new technologies. However, there are still areas that require more manual work and digitising them would reduce the administrative burden and deliver savings.