According to Joseph Carrozzi, managing partner at accounting firm Ernst & Young, the level of focus on tax has never been as great as it is now.
"Corporate governance, auditor independence and an increased focus on large corporates' tax compliance in recent years by the tax office are all adding pressure," he
says, referring to the findings of the firm's latest biennial survey Maximizing value in the Australasian corporate tax function.
says this is a relatively new challenge for many Australian corporate tax areas.
"They need to manage their companies' global tax exposures across different time zones and completely different jurisdictions, while steering clear of transfer pricing laws.This needs to be very hands-on, and ranges from negotiating a tax settlement in some third world countries, to fielding the complex demands from tax authorities in more advanced countries," he
In a further blow to the image of corporate tax professionals as "bean counters", quietly looking after compliance issues, Carrozzi
has noticed an increase in the number of Big Four senior tax managers with "people skills" being headhunted by corporates over the last 12 to 18 months."They are highly valuable and highly poachable people," he
says."On the other side, there has not been a lot of turnover among corporate tax staff, which is good.This should be a major goal."Carrozzi
sees the major challenge for corporate tax departments as coping with increased workloads, because the tax reform agenda in this country has been unrelenting."It's a uniquely Australian problem," he
says."In the last few years we've seen business tax reform, the transition to the GST system, reform of international tax - and it's continuing, with further big tranches of legislation being released this year."
Increased tax complexity has generally not been matched by increase in investment in the company tax function, however, with 47% of the survey respondents reporting no change in tax function budgets since 2001 - and another 13% reported budget decreases.
"Tax managers need to communicate the value that the tax function adds on acquisitions, refinancing, share buybacks, especially in the financial services industry.The tax issues associated with restructuring in particular have given savvy tax managers opportunities to take on more strategic roles," says Carrozzi
Being out of the spotlight doesn't lessen a CFO's need to pay attention to managing the tax function," says Carrozzi