Foreword: Reshaping the tax landscape to aid economic recovery
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Foreword: Reshaping the tax landscape to aid economic recovery

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The first edition of the EY Asia-Pacific guide comes timely as markets rebuild following a disruptive start to 2020. Asia-Pacific Tax Leader, Eng Ping Yeo, introduces the key themes that businesses must anticipate as the region looks forward to the post COVID-19 era.

Click here to read the entire 2020 EY-ITR Asia Pacific Guide

The tax function is gaining more recognition as an essential part of a high-performance organisation, and its role has gained increasing prominence as businesses navigate through the acute stress and disruptions arising from the COVID-19 pandemic.

Restrictions on the movement of goods and people have forced businesses to rethink market behaviour, supply chains, workforce agility, access to funds and capital, and tax is an important element of any course of action being considered. There are also tax-specific risks that need to be managed, for example the integrity of established tax structures and in-house tax policies on matters such as transfer pricing or the viability of tax incentives secured under different economic circumstances.

Amid the COVID-19 disruption, apart from delivering on business-as-usual tax needs, the tax function has also been called upon to identify and access government stimulus packages which encompass non-tax measures from around the world. On the contrary, governments may urgently start looking for avenues to fund stimulus packages, which in most cases are at unprecedented levels.

Despite the disruption, international tax debates around profit-shifting and taxation of digital businesses have not abated and the discussions have in fact intensified. More is expected from the tax function as it is required to stay abreast of these policy trends and provide a voice for organisations to influence policy outcomes while also providing a plan on the way forward.

While excellent tax accounting and computational skills remain key competencies required from a tax professional, there is no doubt that tax professionals of today perform a complex and multi-faceted role. They deliver the highest value-add when the tax function is embedded in the broader strategy of the organisation – one that is connected with the external environment and empowered to shape and drive the transformation of the tax function in line with the aspirations of the organisation.

We are seeing how this is enabled and accelerated by technology, allowing tax functions to do more with less, and to realise ambitions which seemed far-fetched otherwise. In a data-enabled organisation, the ability to process large volumes of data to uncover tax inefficiencies or missed opportunities, or to garner greater trust in the tax outcomes through increased data integrity, provides a real advantage. This is especially the case in risk-based tax audit environments, or more fundamentally, to keep the tax function fully compliant.

With more staff working remotely, organisations which have invested in technologies realise that they have gained an upper hand in this new virtual environment, while those who did not, find themselves struggling with compliance demands, let alone be able to respond proactively to new tax laws and policies.

Many tax functions are also reassessing the resilience of their current operating model, and at EY, the tax team is working closely with many organisations to reimagine their tax and finance functions for the future, where they are considering out-sourcing models and technology solutions. The EY People Advisory Services and Law teams are actively engaged in discussions about the transformation of the talent and law functions. These are emerging trends which started before COVID-19 and have been further accelerated in response to business needs for transformation.

EY is honoured to be working with ITR to present the first edition of the EY Asia-Pacific guide. Through these articles, compiled from our various specialty services leaders, we hope to bring you insights on the tax issues that matter to you.

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