A transformed tax function
Tax governance must be embedded into new ways of working. As organisations grow, whether organically or through acquisition, tax process becomes more complex. Controls over tax reporting and broader compliance can become disaggregated and residual risk increases.
Revenue authorities are increasing their focus on ensuring organisations pay the right amount of tax and have strong governance frameworks in place to achieve this outcome.
The Australian Taxation Office (ATO) expects organisations to have a governance model that incorporates a formalised and documented tax control framework, an informed and engaged board and clarity around roles and responsibilities.
Risk identification and management of significant transactions together with a commitment to ongoing control testing and managing control weaknesses is becoming best practice across governance frameworks.
Our experience shows that good tax governance can not be separated from the way of working.
Organisations that implement governance projects separate from broader tax transformation risk creating a disconnect between what they espouse and what they do. Building governance without transformation or driving transformation absent governance is likely to increase tax risk reduce efficiency and, in the long run, increase cost.
