By Richard Cornelisse, Big4.com Guest Blogger
For a long time the indirect tax profession has been an individual sport. Due to the change of the tax market and client needs the profession evolves or is evolving in more a team sport. It is simply no longer possible to excel in everything re global indirect tax management. What has changed over the years?
The scientific method
If the mutual aim is learning and growing together, it can never be about being right or wrong. It should be about recognizing together the problem, measure the size of that problem, determine why the problem exists, and generate a set of solutions to make sure that the problem goes away. This is the scientific method we know from high school and/or university. The daily practice was about debating and challenging each other.
I have studied tax law myself. Based on factual information provided we had to find and analyze the appropriate tax and case law, take position and defend. That meant the ability to interpret and translate the somewhat ‘foreign’ language used by the legislator and judges.
Such scientific thinking could be trained and challenged further by simply changing the factual pattern and subsequently predict the impact and generate solutions to make the problem go away or to realize the opportunities.
Our profession will become a team sport
The next step is to think about an approach how to confirm any of these new risks or opportunities in an efficient and effective way at client’s level. What do I need to know to check whether the risk or opportunity exists for a specific client? The endgame is the ability to effectively communicate the solution, both internal (own organization) as external (clients, tax administration).
We learn a lot from others especially if we disagree, take position and keep an open mind. We might have forgotten to practice this scientific ‘teamwork’ method structurally in our day to day practice, but I believe the future role of an indirect tax professional needs such an approach to make a difference. Why? I believe our profession will become more a team sport.
The changing world from an adviser perspective
What is different nowadays?
When I started about 19 years ago, indirect tax specialists were scarce, hardly any in-house indirect tax functions and content that nowadays is free available on the internet could still be sold.
“In the land of the blind the one-eyed man is king”
The adviser could work more reactive. A comparison can be made with a doctor: patients in the waiting room, diagnose the patients, find the problem and give some pills to remediate or optimize the situation. We had full access of all kinds of VAT planning schemes and the tax profession – both buyer as seller – were both much more product focused. We as advisers were targeting new patients. That is how I did my first baby steps in the profession. An approach that I nowadays dislike.
When I started the (start up) salaries were much lower and that meant lower charge out rates. The cause effect of increase of salaries is one of the reasons why tax professionals nowadays have to grow up faster. Higher salary means higher charge out rates and from a client perspective higher bills means higher expectation. We need to deliver higher quality and practicality. That is a fact of life.
The changing world from a client perspective
Besides the introduction of anti abuse law, clients themselves and also their needs have changed. The patients have become doctors themselves via setting up own in-house indirect tax functions. Via tax industry networks tax knowledge is shared and communicated within industry. The result is that the service offering and the level of ability of an external adviser had to evolve as well.
Change of client needs also took place because of factors such as:
- the use of technology,
- scandals like the global credit crisis and Enron,
- increased tax authority scrutiny, etc.
Discussions about accountability put not only the external adviser but also the in-house indirect tax function in a more proactive mode. I refer to my Blog of March 5.
My guest blog ‘About Market Leadership And Non Traditional Competitors‘ was about social media and technology developments and the impact on both clients needs and the service providing industry in general. Technology development will simply change clients needs further.
One man’s weakness, is another man’s strength, let’s team up
Because of these changes tax technical expertise has become more a basic skill from an adviser perspective. The soft skills of the adviser are and will become the key differentiator. Due to all technological developments it is already part of our present and future. A tax technical advice has to be implemented in systems, processes and controls. Instructions have to be given to people outside the tax function. Alignment with the business is key for the tax function to plan in time and avoid future firefighting.
In order to challenge and support a client in his mission an adviser should besides excellent technical skills have a good understanding of communication and collaboration, project management, change management, information technology, negotiation and leadership. These competences overall are needed to be successful. This is not only applicable for the individual adviser, but as well for an organization with the aim to achieve or maintain market leadership.
The indirect tax profession has been an individual sport for a very long time. It is still about the individual tax technical strength and personal practical experience and the supporting staff are often trained by that individual.
Without any doubt many are and will remain successful. It is, however, my opinion that the future indirect tax professional will need a different approach.
Why? It is simply no longer possible to excel in everything re global indirect tax management. That means that certain people excel in certain areas of indirect tax and the outcome of the overall team effort will make the real difference from a quality standard perspective.
“Break down barriers and improve teamwork up, down, and across organizational lines. A considerable amount of money is lost due to disconnects or competition between groups that should be working for a common cause: providing value to customers” Jack Welch
“One man’s weakness, is another man strength, let’s team up” Richard Cornelisse
- Do you agree with the above?
- Is teaming supported and stimulated within your organization?
- How does your people performance matrices evaluate teaming?
- What are the Key Performance Indicators?
- What is the weight ‘in practice’ of team effort in overall performance evaluation?
- Looking back do you need any improvement?
Richard’s other Big4 publications
- How to Execute A Tax Strategic Plan And Be Successful
- About Market Leadership And Non Traditional Competitors
- Centralized Business Models And ‘Indirect Tax Automation’
- How To Manage The Perception Of C-level And Realize Tax Objectives
- The Conflict Between ‘Actual To Budget’ Controls And ‘Budget-based Compensation Targets’
- Tax Controversy Strategy: ‘Proactively Managing The Changing Landscape’
- About ‘Business Integrity And ‘Being Inspired’
- Would European Value Added Tax Work For The United States?
- US VAT Introduction Versus The Proposed Changes Of The ‘European Union’ VAT System
Richard Cornelisse is CEO of the KEY Group and worked previously as Big4 Partner in the Tax Performance Advisory and Indirect Tax Practice and blogs on Tax Function Effectiveness and Tax Control Framework developments.