In the intricate world of global economics, business tax is a cornerstone, providing governments with essential revenue for public services and infrastructure, thereby nurturing economic growth. This role’s complexity brings myriad tax implications and a substantial administrative load, increasing operational burdens and complicating compliance with diverse tax laws.
Technology, however, is emerging as a powerful ally. As tax operations become increasingly complex, advanced technologies offer streamlined processes for enhanced efficiency. Enter tax technology engineering experts like Santhosh Kumar Lalgudi. At EY’s Tax Technology & Transformation (TTT) group, Santhosh, an Emerging Technology Leader focussing on Blockchain and Cloud Solutions, applies his experience to revolutionize the traditional approaches followed in the tax industry.
Santhosh, an alumnus of the University of Pennsylvania with his Master’s in Electrical Engineering and a Bachelor’s in Electronics and Communication Engineering from India, is now based in Hoboken, New Jersey. He is at the forefront of tax technology innovation, with his work not only earning him recognition across the field but also positioning him as a thought leader who drives transformation in tax operations through the strategic use of technology, automation, and emerging technologies like AI and Blockchain.
His approach is methodical and practical: dissecting needs, integrating technological advancements, and cultivating continuous collaboration.
What the Tax Industry Truly Needs
Tax operations are fraught with challenges, primarily due to the sheer volume and complexity of data that must be meticulously recorded and analyzed. As Santhosh notes in his recent piece for Accounting Today, the main issues stem from the variety and volume of data, often not tailored for tax purposes, leading to concerns over completeness and quality.
The traditional manual handling of tax data is increasingly impractical. It’s not only error-prone and time-consuming but also inefficient in an age where instantaneous data processing is becoming standard. Santhosh points out that the complexity is compounded by tax operations’ unique rules and rates, highlighting the urgency for automated, technology-driven solutions, such as cloud technologies and analytics.
Pioneering Tax Technology Transformation
The core of tax technology solutions is to simplify tax processes, ensure compliance, and allow for more strategic, data-driven decision-making in tax planning and other financial endeavors. Santhosh mentions, “The modern-day tax department faces numerous operational, legislative, and technical challenges, so the next tax generation is focused on digitization of operations.”
The tax technology expert emphasizes analytics and cloud technologies as vital in automating tax processes to enhance decision-making and compliance with taxation. By employing advanced analytics, tax professionals can sift through vast amounts of transactional data to unearth insights, identify trends, and detect anomalies. This not only facilitates more accurate tax calculations but also enables proactive management, minimizing risks associated with tax reporting errors and non-compliance.
As Santhosh highlights in his article titled, ‘Analytics Expand in Corporate Tax,’ having analytics allows corporations to gain rapid data alignment by establishing a single source of truth for tax data and standardized data transformation. This process paves the way for real-time tax reporting and forecasting, allowing organizations to anticipate tax liabilities better and plan accordingly.
Once data is gathered from various sources, cloud technologies enable it to be blended and enriched to its appropriate target destination for processing. According to Santhosh, as companies set up their tax processes with data complexities in mind, other critical operations can occur seamlessly, with little to no manual intervention. This minimizes errors and frees up tax professionals to focus on more strategic aspects of tax management, such as planning and optimization.
This is precisely what Santhosh has pioneered as he leads the technical transformation execution for various Fortune 500 companies – through tax technology advisory and systems implementation support around digital tax reporting and compliance. What took roughly weeks for traditional tax data collection and processing methods to accomplish only took minutes, setting a new standard in tax operations.
Santhosh adds, “Analytic tools for tax are no longer a nice-to-have but a must-have for critical aspects of business operations. It brings considerable time savings in data collection, cleansing, and processing, a true game changer in the field.”
Acknowledging Industry Realities
Despite the progress, Santhosh acknowledges the imperfections of tax technology. There is still much work to be done, with integration challenges varying by business needs and adaptability. He recognizes the eagerness of businesses to adopt new technologies and the technical complexities that can hinder such advancements. In a recent global webcast on Finance and Tax Convergence, where he was featured on a panel, he referenced the importance of system-to-system connections and how Enterprise Resource Planning systems or ERP are increasingly adopting them to bridge the gap with Tax Systems that are often isolated from the rest of the enterprise.
Santhosh emphasizes the importance of client collaboration and customizing technological solutions to meet the unique challenges of each business. He believes, “Innovation thrives on collaboration. Through articles, talks, or tech tools, my goal is to help businesses not only keep pace but also stay ahead in the technology curve.”
Complex Tax Processes Simplified
The US hosts one of the most bustling taxation systems globally, owing to its vast economy and complex regulatory framework. The expertise of tax technology professionals like Santhosh proves invaluable in navigating the complexities of the US tax realm. With recent explosions in data, most experts in the accounting and tax sectors fully expect this to be a global challenge.
With the demanding tax regulatory landscape, an ever-changing economy, and growing mandates for digital taxation requirements, tax technologists like Santhosh are high in demand but low in supply today. His adeptness in leveraging modern technologies like cloud technologies, artificial intelligence, blockchain, and analytics helps untangle complex tax procedures, thereby facilitating smoother, more efficient tax operations for many industries and sectors in the US and globally.