For decades, tax was largely considered a local affair, a labyrinth of domestic laws and national priorities. Yet, the landscape has fundamentally shifted. Global business operations, rapid digital transformation, and an ever-evolving regulatory environment are challenging this long-held view. Today, with geopolitical shifts, economic pressures, and technological leaps driving unprecedented changes in tax rules, international collaboration isn’t just an option—it’s a strategic imperative for businesses worldwide.
Navigating the Global Tax Tectonic Shift
At “The Future of Tax: Global Perspectives for Leaders,” Grant Thornton’s APAC tax leaders confronted these realities head-on, sharing both stark truths and actionable strategies. Discussions ranged from the decade-long saga of BEPS Pillars 1 and 2 to the proliferation of digital services taxes (DSTs) and the critical evolution of tax professionals into strategic business advisors. The core message was unambiguous: sharing best practices across borders is vital for businesses, especially those in the Philippines, to navigate complexity, safeguard their reputation, and capitalize on new opportunities.
Vikas Vasal, global head of tax at Grant Thornton International Ltd., highlighted that global tax alignment is no longer a luxury but a practical necessity for companies operating in multiple jurisdictions. He pointed to the extensive effort behind BEPS Pillars 1 and 2, where over 140 countries reached a consensus, only for major economies like Europe and the US to face slow or uneven implementation. This creates a “wait-and-watch” dilemma for many Asian nations, but for companies with cross-border operations, compliance obligations—more documentation, stricter governance, and expanded reporting—are already a reality.
Vasal also drew attention to broader macroeconomic factors influencing global tax policy, such as the tariffs imposed by the current US administration. He spoke of the “trust deficit” and “twisted geopolitics” disrupting global supply chains, necessitating greater collaboration among companies to mitigate these impacts.
Beyond BEPS, the rapid rise of digital services taxes and the automation of information exchange are profoundly reshaping global compliance expectations. For exporters and digital service providers, these changes will directly impact pricing structures, cost models, and reputation management. Ethical tax standards, therefore, are no longer a mere footnote but a critical component of business strategy.
“In the future, AI will do our taxes. Until then, we’ll keep doing AI’s taxes,” Vasal quipped, underscoring the emerging challenge of taxing the digital economy. From servers to algorithms, new tax bases are creating both complexity and opportunity, demanding that businesses and professionals unlearn, relearn, and reskill as technology and policy continue to converge.
Tax as a Strategic Lever for Business Sustainability
As regulations mature, the tax landscape has become a dynamic space where technology, transparency, and ethics powerfully intersect. Governments are increasingly demanding real-time access to companies’ Enterprise Resource Planning (ERP) systems, signaling a future where tax authorities can directly monitor transactions. This shift, coupled with global pushes for ethical tax standards, compels businesses to fundamentally rethink their approach to tax.
Today, tax serves as a powerful strategic lever for sustainability. It influences decisions related to carbon taxes, ESG (Environmental, Social, and Governance) incentives, and global policy alignment. For leaders, this evolution highlights a crucial truth: tax strategy is now inextricably linked with overall business strategy.
Implications for the Philippine Tax Landscape
For Philippine businesses, global tax developments are not abstract concepts; they are actively shaping local realities. While major economies may still be grappling with the full enforcement of BEPS Pillars 1 and 2, the presence of multinationals already imposes compliance obligations. Waiting for formal local adoption is not an option; proactive readiness is paramount.
The rise of digital services taxes adds another layer of complexity. Philippine exporters—whether in technology, services, or digital products—will inevitably feel the impact as counterpart markets impose DSTs, affecting pricing structures, cost models, and contractual terms. Beyond purely financial implications, tax has become a critical reputational issue. Ethical tax standards and transparency are now integral to ESG narratives, directly influencing investor confidence and customer trust. Aligning tax strategies with sustainability goals, leveraging ESG-related tax incentives, and preparing for emerging obligations like carbon taxes are essential for long-term success.
Finally, the digitalization of tax administration will redefine compliance within the Philippines. As governments worldwide move towards direct ERP access and real-time data exchange, similar trends will undoubtedly reach local regulators. This demands robust data governance, system readiness, and meticulous auditability. For Philippine tax leaders, anticipating these global trends and adapting locally will be the key to leading the way.
Redefining Tax Leadership
The role of tax professionals in the Philippines is undergoing a profound evolution. What was once primarily a function focused on compliance and reporting is now a strategic pillar of business decision-making. From pricing and supply chain design to digital economy taxation, leaders are now expected to anticipate global trends, align with evolving regulations, and integrate tax considerations into broader corporate strategies, including safeguarding brand reputation.
Modern tax leadership now spans four critical dimensions:
- “Always-on” Compliance: Governments are moving towards direct integration with company ERP systems for real-time monitoring, making continuous compliance a necessity.
- Global Tax Alignment: Understanding minimum tax rules and digital economy taxation is no longer optional but essential for cross-border operations.
- Sustainability Lever: Tax influences decisions through carbon taxes, ESG incentives, and plays a key role in reputation management.
- Strategic Advisory: Tax professionals must act as strategic advisors, aligning policy frameworks, technology, and business priorities to foster growth and resilience.
Simultaneously, ethical tax standards and ESG-linked incentives are reshaping expectations, cementing tax as a critical component of reputation management and stakeholder trust. Businesses that fail to adapt risk not only penalties but also significant reputational damage in an era where tax behavior is firmly part of the ESG narrative.
For Philippine tax professionals, the challenge—and indeed, the immense opportunity—lies in reskilling and redefining their role. The future demands expertise in technology-driven compliance, nuanced policy interpretation, and strategic advisory. Staying ahead of global developments and technological advancements is no longer an advantage; it is an absolute imperative. Truly, tax leadership today is more than just numbers—it’s about actively shaping the future of business itself.
Nikkolai Canceran is a partner for the Tax Advisory & Compliance Practice Area at P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing firms in the Philippines, composed of 29 partners and 1,500 staff members.
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Source: Original Article
