Whilst there are many reasons for carrying out an ERP change or upgrade, tax or regulatory issues rarely feature at the top most reasons for the decision to make a change. Such changes or upgrades are usually necessitated by the need to stay competitive via better decision making and improve the user experience. The decision of an ERP upgrade ends up being the Information Technology (IT) manager and the Finance functional head’s responsibility. ERP however covers all areas of a business operations, from finance, accounting, procurement, customer sales management, logistics, asset management and supply chain.
With the ever-evolving current environment, tax should be part of the foundation of any such discussion surrounding ERP changes or digital transformation in general. Precisely because all the areas covered under ERP have tax implications. From supply chain, (which has withholding tax and custom simplications) asset management (withholding taxes, capital allowance computations), human resources (PAYE)to sales (VAT and related levies). It is essential that both the internal tax function and/or the external tax consultants should all play a role from the planning stages of any ERP upgrade to the final testing stages before any new ERP is deployed. This inclusion in the planning stages will avoid penalties and save a business entity from potential compounding interest from non-compliance with the tax laws.
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