Michael Levin-Epstein, Tax Executive’s senior editor, interviewed Robert Bahash, general manager of Thomson Reuters’ corporate tax and trade business unit, for this Perspective article in December 2022.
Michael Levin-Epstein: I know that you’re coming off Thomson Reuters’ big SYNERGY conference attended by about 1,000 tax professionals, so you’re keenly aware of the issues that tax departments face today. I wanted to focus on two major issues, one in the HR space and the other in technology, and there’s certainly a connection between the two. Let’s begin with HR. What can tax departments do to optimize the situation where their workforces are increasingly hybrid?
Robert Bahash: I think a lot of tax departments have already begun enabling hybrid work, and where they’re doing that, they’re probably doing it with different levels on the strength scale. But they’re leveraging technology to do that. Just like we here are on a Teams call together, leveraging technology to conduct this call, and not in person, all companies and tax departments are leveraging the same. And this is just really a medium of communication that we have here, and it’s an important one. It helps people stay connected. But I think where companies are setting themselves apart in their ability to run a truly remote workforce is the level of tax technology that they’re using. I’m talking about software that enables companies to give employees access and do their work anyplace, anytime. Typically, it would be delivered in a SaaS [software-as-a-service] solution in the cloud. It’s a real efficiency-gainer for companies to have a remote workforce, which I think is an important part of the challenge that they face in retaining and attracting talent. It’s not just about the work itself; it’s about how the work gets done, how people can manage their work-life balance, but also how the tools and capabilities that a company leverages helps those employees advance their skill set and progress in their careers.
Levin-Epstein: Another key issue faced not only by tax departments but also employers and companies in general is the desire of younger workers—and workers in general—to better balance work and family and to have freedom in what they’re doing outside of work. What’s your advice to tax departments in terms of recruiting and retaining these workers?
Bahash: I think you have to have a flexible, and be open to a flexible, work environment in order to be competitive today in attracting talent. And that’s very important. It’s a desire of individuals that they want to be able to create balance in their life, but they also want to do meaningful work. So, you know, their level of being able to do really important work and make an impact is augmented by the use of technology as well. If you think about the old ways of working for tax departments, doing work manually and through Excel is highly prone to error and is not efficient in any way. Companies are global. They’ve got operations in many, many states and countries now, working across different time zones and [with] team members in many of those locations. So, the way employees work together and get their work done in a more efficient way and reduce risk is augmented by technology. But, importantly, people want to do meaningful work. They’re not attracted to gathering data, sensitizing data, and then having to do that over and over again. So, by leveraging technology and enabling tax professionals to not focus on the data gathering and the data cleansing, but to focus on the analysis and decision-making, they can get their core tax work done faster but at the same time free up time to be more of a strategic advisor to their companies.
Levin-Epstein: That’s absolutely right. Can you give us a sense of how companies could recruit more effectively from the pool of potential employees of tax departments?
Bahash: Let me say I’m not a recruiter, but I can weigh in a little bit more on what I think makes a tax department attractive. I think some of the things I’ve already said speak to that: having a flexible work environment that meets the interests and needs of people in and out of the workplace, [giving them] the ability to do their work more efficiently, which technology helps with, and then freeing up that time for them to drive more value-added work within their company. I think that’s what people want. In fact, in speaking to tax professionals at companies, the top skill they feel they need to advance in their careers is tax technology. That was cited in a survey that we’ve done—forty-three percent of the respondents pointed to that alone. So, companies that invest in that are addressing that key need and desire that individuals have to develop their own careers. So, I think a place that’s attractive to work in is one that enables work-life balance, enables people to grow in their careers and develop the skills that are important, and also enables them to advance to management levels and add value to their companies.
Levin-Epstein: That’s a great summary of the kinds of things that tax departments can do.
Bahash: Can I add one more thing, Michael?
Levin-Epstein: Yes, definitely.
Bahash: In talking about what tax departments do to attract people, one of the limiting factors is that they’re under tremendous budget pressure and an expectation to do more with less. In fact, fifty-seven percent of tax departments feel they don’t have the resources to keep up. And that’s a pretty staggering statistic, and it’s actually up ten percent from last year. So, that strain on their existing staff is coming from that complexity we see, the ability to keep up with constant changing regulation, that workload—that too is aided by and solved through leveraging technology. One of the challenges for tax departments is solved by technology in the ability to keep up, but technology also makes the work more interesting, makes the work more efficient, and then enables them to attract the talent they want.
Levin-Epstein: If you could take a little deeper dive by providing an example of how technology can help tax departments deal with that increasing complexity, that would be helpful.
Bahash: Yeah, sure. I think a good example of leveraging technology would be around the constant changes in [value-added tax] and indirect tax. Think about the number of countries and the continuous changes in VAT rates and regulations. It’s really hard for any company, for that matter, to track and maintain all of those changes on their own. They need somebody to do that for them. And so, one part is just staying on top of the changes, making sure the rates and rules are correct. And then the other is, How do I apply those when I’m doing transactions globally, crossing borders? What’s my ability to apply those rates and rules? So, using an engine to do that, tax technology enables indirect tax, VAT tax compliance, by maintaining the rates and rules in an always up-to-date fashion in one tool and then having an engine that enables the calculation of the application of those rates against transactions on a global basis.
Levin-Epstein: That’s a great answer. We have time for one more question—and it’s an important one. Tax departments have not always been at the table when it comes to discussions about new technology and interacting with IT. How important is it that someone from the tax department be at the table?
Bahash: Extremely important, because the tax department’s core responsibility is ensuring their company’s compliance with tax rules and regulations on a global basis. The tools and capabilities that they use, typically they are the economic buyer and the primary decision maker in that. However, because technology touches a lot of the core systems that companies have, you do see involvement from other groups. So, there’s a collaborative approach that the tax leaders need to take, working across their organization, with IT, with procurement, with finance, with legal, to ensure that they’re selecting the right tool and that the tool they select meets their tax needs but also meets the needs of their organization.