Generative Artificial Intelligence (GenAI) Impact on Tax Profession

The Rise of Generative Artificial Intelligence in the Tax Profession

Generative artificial intelligence (GenAI) is a cutting-edge technology that is beginning to revolutionize the tax profession. Despite being in its early stages, GenAI is poised to have a significant impact on how tax professionals operate. While there are concerns about its accuracy and potential for fraudulent use, the promise of streamlining workflows and reducing time spent on repetitive tasks is enticing.

A recent survey conducted by the Thomson Reuters Institute sheds light on the perceptions and usage of GenAI in professional services. The report reveals that only about 10% of tax firms have fully embraced generative AI, with many still in the consideration phase. Historically, the tax industry has been cautious about adopting new technologies due to regulatory concerns and risk aversion.

Those who have adopted GenAI are using it in various ways, including tax return preparation, research for clients, accounting, bookkeeping, and compliance. The technology also holds promise for developing new advisory services, which could lead to changes in how tax professionals price their services.

One of the main advantages of GenAI is its ability to help tax firms do more with less, especially in the face of a shortage of skilled professionals in the industry. The technology can also assist in navigating complex regulatory issues, such as upcoming regulations like Pillar 2 and e-invoicing requirements.

Clients are increasingly expecting faster turnarounds and lower fees from tax firms that leverage GenAI. More than half of corporate tax departments express a desire for their firms to adopt this technology to enhance efficiency and service delivery.

Overall, GenAI has the potential to drive efficiencies across tax firms of all sizes, from small practices to large consultancies. As the technology becomes more integrated into daily operations, it is expected to reshape how tax professionals work and deliver services to their clients.