Finance and Accounting
How AI is transforming tax planning and strategy
Artificial intelligence is reshaping the finance and accounting landscape, fostering innovation in tax and accounting services. Experts estimate the global market for generative AI in tax management will grow at a CAGR of 30.7%, from $2.44 billion in 2025 to $7.13 billion in 2029. Beyond simple filing and management, artificial intelligence in tax is also helping simplify compliance, offer strategic advice, handle transactional tasks, manage knowledge, and integrate business operations.
Role of AI in tax planning and strategy management
AI solutions, especially generative AI-powered accounting and tax solutions, have proven themselves to be invaluable in modernising how tax professionals approach their role. AI in tax not only automates routine tasks but also streamlines strategic tasks, enhancing tax planning and strategic decision-making. Its benefits extend across several key areas, including:
Enhancing operational efficiency
By automating repetitive, rule-based tasks like data entry, tax calculations, compliance checks, and filing with AI, tax professionals can devote more time to value-added tasks like strategy, collaboration, innovation, and growth. This shift not only helps boost efficiency but also transforms tax and accounting services from a transactional function to a more strategic function.
Optimising tax planning and structuring
AI-powered solutions can help analyse complex tax scenarios and optimise tax structure based on potential tax obligations. Using historical financial data, they can project future tax obligations, facilitating robust tax and financial planning for businesses and equipping organisations with the foresight necessary to manage their tax liabilities effectively.
Informing business decisions
Access to real-time data and advanced analytics tools can help enterprise leaders quickly evaluate the tax implications of various business decisions. AI-powered accounting and tax solutions can also help identify potential areas for tax savings, allowing companies to dynamically reassess their financial strategies and ensuring tax considerations become an integral part of overall business planning.
Managing risks proactively
With instant access to a wealth of aggregated knowledge and insights, AI in tax can help manage risks consistently across operations. This approach to risk management can empower businesses to navigate the complexities of modern tax environments more efficiently.
Establishing operational guiding principles
In addition to bolstering financial planning in business, AI can also help redefine operational standards and establish guiding principles to drive tax strategy. With AI-powered accounting and tax solutions, tax professionals can implement dynamic updates that reflect current market conditions and regulatory standards.
Communicating effectively with stakeholders
Generative AI tools can translate intricate tax data into clear, audience-tailored communication. Whether addressing the C-suite leadership, manager, peers, or broader teams, tax professionals can share insights in an easily digestible format. This can help enhance collaboration and ensure all stakeholders understand the tax implications of business decisions.
Fostering cross-functional collaboration
Through effective, clear communication and transparency, AI can help foster a culture of cross-functional collaboration. It can bridge the gap between tax and financial planning and other business areas, reinforcing the value of artificial intelligence in tax as a catalyst for organisational success.
Infosys BPM helps businesses capitalise on these benefits with AI-powered accounting and tax solutions. Our expertise in enterprise reporting, analysis and planning, accounting, and tax support can empower enterprise leaders and tax professionals to design, transform, and manage their tax planning operations effectively. With end-to-end tax process support, companies can integrate AI into tax planning to ensure enhanced efficiency, compliance, and strategic foresight to achieve their business objectives.
Key considerations and risks of using AI in tax and financial planning for businesses
While AI in tax offers significant benefits, organisations must be aware and conscious of associated risks and ethical implications, including:
Regulated roles and ethical standards
Tax professionals operate in highly regulated environments where quality and ethical standards are paramount. As AI in tax becomes standard practice, organisations must ensure they meet these standards to safeguard the integrity of tax and accounting services.
Jurisdictional domain knowledge
Tax expertise is often rooted in specific jurisdictions. However, public AI tools may fail to recognise these boundaries, raising concerns about evolving training and regulatory practices and artificial intelligence in tax continues to become an operational standard.
Data security and privacy
Inputting sensitive data into AI-powered accounting and tax solutions can pose significant data security and privacy risks if the information is inadvertently exposed or used to train public models. Companies must implement robust data security protocols and invest in secure AI environments to ensure that confidential information remains secure.
Accuracy and reliability of AI outputs
Generative AI tools can sometimes produce inaccurate or misleading outputs – or “hallucinations”. This places the onus of verifying AI-generated information on tax professionals and strategy leaders.
Despite these challenges, using AI responsibly and ethically can help unlock its full potential for tax and financial planning for businesses.
Conclusion
AI-powered tax and accounting services are revolutionising tax planning and strategy, enhancing operational efficiency, optimising business decision-making, and managing risks effectively. Embracing AI in tax has the potential to pave the way for a smarter, more agile approach to tax and financial planning for businesses. However, remaining mindful of ethical and security considerations and taking necessary precautions is imperative.
