Thomson Reuters | Thomson Reuters Survey Reveals a 51 Percent Increase...

14 Nov 2011

Thomson Reuters Survey Reveals a 51 Percent Increase in Indirect Tax Resources

U.S. Government's Focus on Raising Revenue through Taxes Prompts Rapid Company Response

A new Thomson Reuters survey finds a 51 percent increase in the resources global companies allocate to manage indirect tax compliance as compared to five years ago. Concern over U.S. government’s need to raise revenue through taxes has prompted companies to optimize their indirect tax management function, with 88 percent claiming they are ready to successfully undergo a government audit. However, the survey also revealed that 60 percent of companies lack a standardized process for managing a government audit, indicating a gap for many companies looking to achieve superior results from their indirect tax compliance efforts.

The Thomson Reuters poll follows a recent Aberdeen Group report that surveyed nearly 300 companies and found that the companies best prepared to handle an audit have employed a strategic combination of process re-engineering and software automation. Not only do these practices minimize the risk of exposure, fines, and penalties, but they are critical to achieving a best-in-class indirect tax performance, according to Aberdeen Group (“Streamlining Sales and Use Tax Management,” June 2011).

“These results indicate that despite the poor economy, companies understand the need to put resources toward indirect tax workflow operations,” said Carla Yrjanson, vice president of Tax Research and Content at Thomson Reuters. “Most companies have one or two of the essential components that Aberdeen recommends, like integrated software or an automated process, but using technology to integrate and standardize procedures for managing audits could further protect companies from large costs from fines and audits.”

Additional highlights of the survey include:

76 percent use software to automate indirect tax management processes
72 percent have centralized management of tax information

In the third quarter 2011, Thomson Reuters surveyed 40 finance and tax leaders from leading companies on their indirect tax processes. Information about ONESOURCE Indirect Tax from Thomson Reuters can be found at: http://onesource.thomsonreuters.com/solutions/indirect-tax.

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