Despite the impact that disruptive technology has had on most industries over the past several decades, the tax space has largely been left untouched. Until now. In this report, we explore how recent technological and economic trends have ushered in the era of TaxTech—and opportunities for innovation in the tax sector.
Disruptive transformations to the tax industry
The field of taxation has always been impacted by business and regulatory-related changes, but the slow pace at which with exponential acceleration recently the industry has evolved is now accelerating exponentially. Due to technological, cultural, sociasocietall (including the impact of COVID-19), and business dynamics, taxes have undergone remarkable and disruptive transformations, similar to otherfields of fintech. Today, the tax industry operates within an extremely complex ecosystem where conflicts disparities often arise due to discrepancies incongruity between at the state, national, regional, and global legislation. Technology in combination with professional tax services are necessary to fulfill taxpayers’ reporting and planning needs.
In this report we aim to surgically unpack these new phenomena, first by highlighting some of the major macro tax trends and tax implications that global economies are experiencing, and then by covering and analyzing the existing landscape of TaxTech solutions. We also assess ways in which we believe companies and individuals can leverage these technologies and solutions to improve and optimize the tax process. Finally, we explore what we consider to be the next big thing in the Fintech industry – embedded tax.
While self-employment is not a new trend, growing numbers of gig workers and participants in the sharing economy do not fully appreciate how their current work environment may impact their tax liabilities.