Thinking differently about compliance can power reinvention and reframe the role that tax can play in building trust for your organisation.
In today’s business landscape, change is constant and the ability to rapidly reinvent is a precondition of success. Business leaders recognise the stakes are getting higher: according to PwC's Global CEO Survey, 45% of CEOs are unsure whether their companies will even survive the next decade on their current path.
Bottom line? Reinvention is no longer optional — it's essential - and tax compliance has an important role to play.
The elevated impact of compliance
Rethinking compliance can serve as a powerful catalyst for a broader business transformation, allowing finance and tax functions to strengthen trust with stakeholders, improve efficiency, and enhance strategic decision-making.
Compliance, when approached strategically, is about more than meeting regulatory requirements — it’s a highly effective change enabler —providing both the trust and the agility to allow the whole organisation to pivot quickly and confidently when exploring new business models, new markets, or new deals/M&A activity. It also helps the business see and manage risk more intelligently. By strengthening risk and control mechanisms, organisations can better identify gaps in data, enabling them to respond and remediate issues swiftly. With robust risk strategies, supported by outsourced providers or managed services, businesses are better placed to focus on growth and turn real-world challenges into opportunities.
Poor compliance, in contrast, carries significant risks that extend beyond the obvious potential for regulatory fines, sanctions, and remedial costs. Take the reputational impact. With today’s surge in complex rules and regulations, plus inter-agency cooperation and real time communication between tax authorities, there’s an increasing emphasis on evidencing behaviours through governance and documentation. Our recent 2024 Tax Controversy survey tells us that: “The majority (99%) of respondents undertake activities to minimise behavioural consequences from their tax authorities.”
Pillars of Effective Compliance
Connected Data and Reporting
In today's interconnected business environment, data consistency is crucial. As regulatory requirements expand and evolve, so too does the complexity in organisations. This means leadership needs to obtain a connected view of their compliance ecosystem — including all the different sources and flows of data involved in managing compliance as well as the common data, controls, and reporting activities underlying them. This can include compliance activities relating to sustainability, cyber, data, AI, ESG, and transparency reporting, as well as tax. Connected, quality data not only helps companies meet their compliance obligations but also builds trust with business stakeholders, investors, regulators, and customers. Connected tax compliance is now a must.
Connected compliance begins with a robust assessment of the organisation’s current data architecture, systems, processes, technology capabilities and resources. This is key in defining a future state that supports both day-to-day compliance and broader value creation, helping instil greater confidence to fuel transformation and broader business model reinvention. Having the right technology and controls in place is an important part of this, but it’s equally critical to consider people and processes as well as technology and data.
“Having consistent, connected, trusted data with inbuilt data validation controls is now a baseline requirement for tax and finance teams. This can only be achieved by having closely connected and coordinated operations across different taxes and territories. It’s about harnessing existing networks and new technologies to create more value and trust across the organisation through connected tax compliance”
Big picture? If compliance is neglected, trust in the whole company is eroded. Reinventing compliance is inextricably linked to having rapid access to high-quality data that leaders can trust in making decisions.
Resilience Through Agility
Organisations can boost resilience by integrating agility into their systems, processes, and infrastructure to help see risk more clearly. This is the moment to start building the agile tax function of the future. Organisations can boost resilience by integrating agility into their systems, processes, and infrastructure to help see risk more clearly. This is the moment to start building the agile. It starts by considering connected compliance as part of any business transformation or IT change initiative, so that robust controls and data reporting can be built in during the planning and design phase.
“Above all, it’s essential to stop treating compliance as an isolated ‘point-in-time’ task, and integrate it into the organisation’s business data flow, including broader transformation efforts.”
A well-designed compliance transformation starts with a clean slate and looks to reimagine processes from the ground up. In doing so, businesses are better able to craft truly agile, flexible compliance operations where responsiveness is built in from day one. Many clients have seen increases in Return on Investment by using Finance/Technology/AI transformation as a clean sheet for rebuilding and connecting compliance processes.
Building a Future-Fit Compliance Ecosystem
Compliance approaches can no longer be static; organisations need to build compliance ‘ecosystems’ that can help them predict the impact of regulatory and reporting changes and respond quickly. Horizon scanning capabilities and scenario planning will be key parts of ‘seeing and responding to risk’. AI tools can assist with this but need to be built into a holistic compliance and business transformation exercise. Access to a flexible pool of resources and specialists as the skills of a compliance specialist evolve is also key. Companies are also looking at how to connect skills and resources across different lines of the organisation to take an integrated approach to governance, risk, and compliance and maximise efficiency and impact; for example, how Compliance, Risk, and Internal Audit teams coordinate (PwC’s Global Internal Audit Study 2023 explored these concepts of alignment).
“Unchecked, risk can threaten a company's confidence to navigate change and reinvent. However, taking intelligent risk - based on robust and trusted data - can provide the agility to outpace competitors and thrive.”
Understanding the Total Cost of Compliance
Lastly, before embarking on a transformation initiative, it’s crucial to understand the financial impact of compliance processes. PwC has invested in tools that help organisations understand the true cost. These tools can provide a benchmark of the current impact of compliance on their operations and can be used to identify opportunities to not only reduce costs but also streamline processes, improve efficiency, and drive long-term strategic value.
Final thought
Ultimately, the reinvention of compliance is about more than just meeting regulatory requirements. It's about creating a strategic asset that acts as a change enabler and powers business transformation—helping companies adapt to new challenges, seize new opportunities, manage risk intelligently, and build trust with stakeholders. PwC’s Global Risk Survey 2023 explores how risk strategies, particularly those leveraging technology, are fueling resilience, reinvention, and growth.
By reimagining processes from the ground up, understanding the total cost of compliance, building resilience through agility, leveraging connected data and reporting, and creating a future-fit compliance ecosystem, organisations can turn compliance into a powerful enabler for growth and innovation. With foresight and strategic planning, compliance can become a catalyst for business success, providing the foundation for a resilient, agile, and forward-looking organisation.
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