Elevating the role that tax and data can play in powering your business

In today's rapidly evolving business landscape, tax functions are under immense pressure to adapt and thrive. The inaugural PwC Global Reframing Tax Survey 2025 sheds light on the critical role of tax in business strategy, drawing insights from over 1,200 executives across 47 countries. The survey reveals that tax leaders are navigating a complex environment marked by regulatory changes, technological advancements, and the need for strategic involvement in business reinvention. With only 43% of tax professionals feeling well-prepared to handle new regulations and 91% of large organisations anticipating an impact from Pillar Two, the urgency to adapt is clear. By addressing skills gaps, embracing AI, and refining operating models, tax functions can build capacity to support broader strategic decision-making that is essential as CEOs look to reinvent their businesses.

Many C-suite executives are recognising the growing strategic role of tax functions in business decision-making. Going beyond compliance, they drive strategic advantage.

But, given the rapidly increasing burdens of compliance complexity, regulatory demands, budget constraints and ever-increasing data volumes, can today’s tax functions rise to meet these heightened expectations?

Yes. But many will need to transform first. Specifically, they need to look beyond day-to-day compliance activities and start tapping into the wealth of insights in connected tax data that can add real value in shaping business strategies. This requires a significant shift in mindsets, skills, and processes. Tax professionals must expand beyond their traditional expertise and become proficient in data analytics, automation, and AI tools. It’s a significant challenge.

But the rewards are there to be taken. By leveraging the right tools and data in the right way, tax teams can not only enhance compliance efficiency, but also equip themselves with the insights they need to cement their seat at the table in broader business reinvention efforts.

The question is: how can we turn this ambition into reality?

Tax is no longer just about crunching compliance data. Today’s tax teams need to be data strategists and business advisors too. A well-structured connected compliance strategy enables them to uncover critical insights, such as accurate effective tax rates or the true position of tax-adjusted business performance across markets.

These insights can play a crucial role in broader decision-making. But to uncover them — and make use of them — companies need the right mix of data skills and tools, supported by agile-connected workflows. As the demands on tax functions grow, requiring new and evolving skills, recruiting the right people for critical tasks becomes increasingly challenging. Many organisations report that their people are often tied up in non-value-added activities, preventing them from playing a more strategic role, leaving valuable tax insights on the table.

The result: missed opportunities to improve risk management and contribute to strategic business planning.

Key actions to consider:

1. Build a strong business case for having a connected tax strategy and approach: Focus on how connected tax insights can drive business performance. Highlight the potential for improved decision-making, risk management, and strategic planning.
2. Assess the existing skills matrix: Identify critical gaps in priority areas like data management, analytics, and AI prompting. This assessment will help in understanding the current capabilities and areas that need improvement.
3. Invest in skills development: Collaborate with managed service providers who can offer ‘Centres of Excellence’ to bring in additional expertise and accelerate learning. This investment will ensure that the tax team is equipped with the necessary skills to leverage connected compliance effectively.

Tax functions that don’t become more agile in the future, could face several significant implications. 43% of respondents felt there could be significant regulatory consequences, with 39% anticipating missing regulatory deadlines if their tax function was not more agile. With 38% stating that they may turn to outsourcing to manage their tax functions.

To address these challenges, several key process improvements will need to be made to ensure the viability of tax functions over the next three years. These include improvements in data quality, as highlighted by 42% of respondents, and the importance of data analytics, emphasised by 38%. Furthermore, 35% of respondents focus on the generation of tax insights, while another 35% stress the need for automation. Connectivity is also crucial, with 33% pointing to its importance, and 31% calling for standardisation.

Today’s extraordinary advances in AI offer immense promise for tax functions — from automating processes, reducing risk, streamlining communication, and revolutionising data insight and horizon scanning. This emerging technology is not just a tool for efficiency—it’s a game-changer for tax functions looking to elevate their role within the organisation, enabling more strategic tax planning and risk assessment. AI tools can help tax functions to analyse and monitor data associated with specific risks, creating risk profiles that can be leveraged in risk assessment discussions. Allowing tax functions to make more informed strategic decisions. But in order to capitalise on opportunities, tax data and processes must be digitally integrated across the business.

However, in an increasingly complex tax environment, they are often faced with challenges in dealing with data. Changing this is a priority. Our PwC Global Reframing Tax Survey found that 15% of respondents felt that the primary challenge for tax functions in the future will be ensuring the soundness and effectiveness of tax governance and internal controls. With 33% stating that the most significant barrier to adopting a more agile approach to tax planning is readily accessible data or insights that can be leveraged.

Without well-structured, trustworthy and connected tax data, businesses risk growing inefficiencies, compliance failures, and missed opportunities. It’s why tax leaders know they must accelerate digitalisation and build a robust data strategy. But many continue to struggle with fragmented and incomplete tax data.

Key actions to consider:

1. Establish robust data controls and governance frameworks: Improve data accuracy, data lineage, and trust in automation. This will help to confirm that the data used for AI-driven insights is reliable and trustworthy.
2. Structure tax data effectively: To effectively leverage AI in strategic tax planning and tax risk management, it is crucial to structure and catalogue tax data effectively. This enables tax professionals to utilise AI-driven insights to their full potential.
3. Automate routine compliance tasks: Free up tax professionals’ bandwidth for higher-value, data-driven work. Automation can handle repetitive tasks, allowing tax teams to focus on strategic initiatives.

A modern tax function must be agile, technology-enabled, and aligned with broader business objectives. But many are still burdened with outdated operating models increasingly unsuited to today’s complex global tax environment. Given the much greater data demands imposed by recent changes like Pillar Two and the EU’s Corporate Sustainability Reporting Directive (CSRD), finding new solutions is becoming increasingly urgent.

Ultimately, tax leaders must be prepared to critically reassess their operating models, identifying opportunities to develop in-house capabilities, bring in external expertise, or adopt a hybrid approach. They can help transform the tax functions through connected compliance strategies which can ultimately lead to significant cost savings.

Establishing robust data controls, compliance technology and the right governance frameworks is essential for capturing, analysing, and reporting on tax data. Having accurate and well-structured tax data enables tax professionals to uncover insights such as effective tax rates and the true position of tax-adjusted business performance across markets. By leveraging connected tax data, they can glean critical insights that drive better decision-making, which not only builds organisational trust, but can also help drive business model reinvention, generate value, reduce risks and costs, and boost shareholder confidence.

This is where partnering with a managed service provider (MSP) can be invaluable. Our PwC Global Reframing Tax Survey found that 78% expect their use of external support, including MSPs for compliance and reporting, to increase over the next 3 years. Many respondents stated that staying ahead of regulatory change (30%), acquiring new skills (29%), having access to tech (28%) and protecting their brand and reputation (28%) as the top reasons for considering a strategic partnership with an MSP.

Transitioning to an MSP is not just about leveraging people but also about harnessing advanced technology and data skills. It provides that agility so many organisations need, as gone are the days where it is a binary decision between inhouse our outsourced compliance. It is important to note that MSP’s have evolved dramatically over the years, from being purely about offering low-cost labour for repetitive tasks, to having a strategic partner who can seamlessly integrate with your business, aligning with your objectives and providing the necessary tools and talent to navigate rapid changes.

Key actions to consider:

1. Evaluate the optimal mix of expertise, technologies, and processes: Assess the current landscape of your tax compliance data and operations. Identify the right blend of in-house expertise, cutting-edge technologies, and streamlined processes that can connect tax compliance data across the business effectively. This evaluation will help in pinpointing areas that need enhancement and those that are already performing well.
2. Leverage managed service providers (MSPs): Explore how an MSP, like PwC, can provide specialised expertise and capabilities to alleviate the day-to-day burden on internal resources. MSPs can offer access to advanced technology ecosystems, skilled professionals, and efficient processes, enabling your tax team to focus on strategic initiatives rather than routine compliance tasks.
3. Align tax processes with business transformation initiatives: Ensure that tax processes are integrated with broader business transformation efforts. This alignment will help in making tax an integral part of strategic discussions, ensuring that tax considerations are embedded in decision-making processes and contribute to overall business performance.

It’s fair to say the typical tax function in a global business is at a pivotal moment and the business case for transformation is strong. With increasing regulatory complexity — exemplified by Pillar Two — combined with growing expectations for tax teams to drive business value, it’s now an imperative for tax leaders to embrace a more connected, data-driven approach. By looking at tax data differently, prioritising data skills development, leveraging AI and automation, and rethinking the tax operating model, organisations can unlock powerful insights that go far beyond compliance. Beyond this, by focusing on cost savings, risk management, and better decision-making, organisations can clearly see the value of investing in transformation initiatives. Tax teams must now seize this opportunity to elevate their role and become indispensable partners in driving business reinvention and competitive advantage.