Within Southeast Asia, 82% of chief financial officers (CFOs) and tax leaders surveyed believe generative artificial intelligence (GenAI) will drive efficiency and effectiveness, up from just 14% a year ago, a survey by EY found.
The latest EY Tax and Finance (TFO) survey gathered insights from CFOs and tax professionals across 32 jurisdictions and 18 industries, including 66 in Southeast Asia across Indonesia, Malaysia and Singapore.
The survey revealed that 92% of respondents in Southeast Asia and 75% of respondents worldwide say they are only in the early stages in their GenAI journey.
For the first time in the six-year history of the survey, cost pressures emerge as the top concern for respondents, with cumulative cost-cutting and inflation significantly eroding tax and finance functions’ budgets in real terms.
Within Southeast Asia, 41% of respondents identified effectively managing budgets as their top priority and 80% are looking to cut costs, compared to 49% and 86% of global respondents.
The survey further highlights that tax functions face an increasing urgency to manage more complex and data-heavy tax responsibilities.
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These obligations include complying with the adoption of recommendations by the Organisation for Economic Cooperation and Development (OECD), such as Pillar Two of the base erosion and profit shifting project (BEPS 2.0), which encourages countries to set a global minimum tax of at least 15% for large corporations.
In Southeast Asia, 38% of organisations anticipate a considerable number of adjustments to source Pillar Two reporting data and 83% expect to make moderate to significant changes to their reporting processes.
The survey found that the talent gap is a critical challenge, with 77% of tax and finance leaders in Southeast Asia feeling the impact of fewer accountants entering the profession while senior cohorts retire.
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Within Southeast Asia, 55% of respondents say they are struggling to retain and attract qualified people, with 64% of Southeast Asia respondents believing that employees without a university degree are an increasingly important source of talent.
More than half of respondents from Southeast Asia say GenAI will not lead to a reduction in the tax function workforce. Instead, companies will transfer their tax and finance employees’ time to more strategic, high-value activities and away from routine compliance tasks.
Elaine Yeo, EY Asean tax and finance operate leader, notes that technology, including GenAI, is revolutionising the tax and finance function, empowering tax professionals to adopt a transformative mindset.
Tax and finance professionals in Southeast Asia need to future-proof the tax function by developing a plan to deploy GenAI responsibly and with confidence, and effective change management strategies should be implemented to guide the implementation of technology into tax processes.
“By doing so, organisations in SEA can strive to stay ahead of the curve, and be well-positioned to navigate in the modern and complex world of digital tax administration,” Yeo adds.
