Reshaping tax management in the AI age

For Singapore’s corporate leaders, the annual tax filing is diminishing as a primary compliance event, superseded by the management of a perpetual data-driven dialogue.

This transformation, driven by artificial intelligence (AI) and digital integration, is recasting the corporate tax function from a compliance checkpoint into a dynamic, strategic discipline.

The evolving trend has a direct impact on financial risk and competitive positioning, with transactions now analysed in real time by global markets and sophisticated regulatory systems such as those implemented by the Inland Revenue Authority of Singapore (Iras).

“Iras deploys advanced tax technologies and data intelligence to make compliance seamless for taxpayers while dynamically managing risks,” said Quek Su Lynn, Iras’ deputy commissioner of its compliance and service excellence group.

To create efficiencies in tax collection and filing, Iras is building an end-to-end digital ecosystem with initiatives including the GST InvoiceNow e-invoicing network – which is being progressively rolled out – and software-driven Seamless Filing that supports organisations in completing tax returns.

For individuals, Iras’ No-Filing Service has made tax filing a non-event for almost two million taxpayers in Singapore.

Such evolutions are driving a rethinking within corporations of their governance, technology and the strategic role of the tax function.

The governance imperative

Businesses are fast moving beyond adopting technology for mere automation, to using tools for predictive analytics and proactive risk management.

Amy Ang, Singapore head of tax at EY, noted that companies are “leveraging AI and tax technology to better track the evolving tax compliance landscape, and adjusting their structures to meet the new requirements”.

“Businesses are also increasingly using digital transformation tools, AI-assisted analytics, and specialised frameworks for risk assessments, to create a more holistic tax operational model that balances regulatory compliance with cost-effectiveness,” she added.

But integrating automated systems across functions often exposes vulnerabilities.

Allen Tan, chair of the Asia-Pacific tax practice at law firm Baker McKenzie, said governance and control gaps may emerge in the areas of data management, system integration, process ownership and training.

“Tax automation relies heavily on high-quality data from various source systems across an enterprise,” said Tan, who is also deputy chair of Singapore Chartered Tax Professionals. “If the tax function is not involved in the design of source systems, or if tax, legal, finance and IT functions are not coordinated and roles are not clearly defined, this will likely result in compromised data integrity and outdated or unreliable information.”

Quek echoed this concern from the regulator’s perspective, noting that the most significant risks emerge from flawed integration and oversight.

“The key risks include data integrity, inadequate segregation of duties, over-reliance on automated outputs without proper validation and escalated cybersecurity risks from increased digitalisation,” she said.

“Strong governance frameworks, robust audit trails and clear ownership are essential to ensure automation enhances compliance rather than introducing new risks.”

Quek suggested that organisations could embrace “compliance by design” by embedding regulatory considerations into their technology architecture from the start instead of retrofitting controls later. 

“This requires a paradigm shift: viewing compliance not as a constraint, but as a strategic enabler. Businesses should deploy multilayered security measures, comprehensive validation checks, clear audit trails, disciplined change management and rigorous pre-deployment testing.”

For EY’s Ang, consistency is a must in automating tax functions.

“There needs to be alignment in data naming, as well as how data from the same source should be treated consistently for tax reporting,” she said. “There should therefore be clear governance agreed upon in a playbook that guides how tax automation is used.”

This environment underscores the increasing value of accredited, strategically minded tax professionals.

The human arbiter

The responsibilities of the tax professional are being elevated from data processor to strategic architect and ethical guarantor.

Quek pointed out that the role of tax professionals has “evolved significantly over the years – from focusing primarily on compliance to collaborating with business partners on strategic analysis and decision-making”.

“They are uniquely positioned to influence digital strategies, deliver data-driven insights and ensure compliance frameworks evolve alongside automation,” she added.

This expanded mandate requires a synthesis of deep technical knowledge, data literacy and strategic advisory capability.

“As digital transformation evolves,” said Ang, “tax professionals can provide guidance on the refinements or adaptions needed to ensure compliance with new tax laws and digital reporting requirements.”

It is here that the judgement of accredited professionals is critical.

Said Baker McKenzie’s Tan: “Over-reliance on technology without the active involvement of tax professionals and proper oversight may risk leading to misinterpretation of regulations, exposing organisations to risks of significant penalties and reputational damage.

“The key is to strike the right balance, leveraging technology for efficiency while ensuring there are appropriate guardrails in place and professional judgement continues to guide critical decisions.”

Achieving this balance requires an understanding that adopting tax technology is not a technology project.

Instead, said Ang, it is an endeavour that “needs to involve tax subject-matter experts working closely with the technology teams to build in the appropriate tax positions to ensure alignment with the business operations, and local and global regulations”.

Tan advocated a formal, cross-functional governance structure.

He noted that a key challenge lies in adapting to rapid changes in tax law and policy, business models, and supply chains, especially for multinational enterprises that need to consider local complexities and nuances across multiple jurisdictions.

“Businesses can consider designating a core cross-functional team, including tax, finance, IT and internal audit, to set global standards relating to the adoption and management of the technology,” he said. “This ensures alignment across the business and provides a central point of accountability for compliance.”

The intelligent future

The direction for tax management in the AI age is clear: technology integration and a predictive future.

“We are shifting from periodic compliance submissions to continuous, intelligent tax management,” said Quek.

She envisions a future where tax technology evolves beyond automation to become an invisible enabler – where compliance is seamlessly woven into business workflows and daily life, remaining effortless yet maintaining trust and transparency. 

“This can only be achieved with strong industry-regulator collaboration to ensure security, interoperability and professional readiness for this complex digital future,” she added.

Ang observed a distinct trend that is becoming entrenched. 

“Digital transformation of tax reporting with real-time data and AI-driven analytics is already under way,” she said. “We are seeing tax administrations globally actively embracing AI and tax technology in tax collection, audits and investigations.”

Yet, in this automated future, human judgement remains the ultimate safeguard.

Tan said that while AI-driven analytics can enhance efficiency and accuracy, they are only as reliable as the assumptions and data behind them.

“Professional judgment remains indispensable in handling complex, high-risk scenarios, as well as managing dispute resolutions, particularly cross-border ones,” he said.

“Organisations should view AI in its proper context: that it is a tool to support, and not replace, the judgement of their people.”

The writer is CEO of Singapore Chartered Tax Professionals, the national institute that benchmarks tax expertise through accreditation and drives excellence in professional standards and technical competency. This series shares insights on the tax issues shaping business today.

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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