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Business Tax Practices - A Direct Impact On Your Businesses Bottom Line

Monday, 11 October 2010   (0 Comments)
Posted by: Author: Hentus Honiball
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Business Tax Practices - A Direct Impact On Your Businesses Bottom Line
Tax practices in businesses should be viewed as a core element of the financial value chain as any tax saving has a direct and immediate impact on your businesses bottom line.However, a positive impact can only be realised if certain amendments are made to current tax practices. 
Hentus Honiball, Associate Director: Consulting for PricewaterhouseCoopers (PwC) firmly believes that businesses should place a stronger emphasis on the way it conducts its tax function and a formal strategy must be developed that aligns tax processes to the overall financial objectives of the business.He says, "The tax function can no longer be viewed in isolation and companies should start investing in their departments to create awareness related to the value adding opportunities that the tax function can deliver to operations.”
Tax divisions generally operate with poor quality data and unfortunately, many still operate using outdated technology which further reduces the quality of the data.A lack of planning combined with manual processing and outdated IT infrastructure has a direct impact on the data quality.Various tools such as business process management and Metadata modellers should be leveraged to deliver a higher level of excellence in this arena.Honiball continues, "The reality is that insufficient data wastes time and the fact that tax divisions are not generally viewed as a core part of the business process results in a duplication of work which inevitably increases operating costs.” 

Businesses serious about improving their internal tax operations should focus on the following critical success factors:
• Stakeholder interaction to promote the tax agenda; 
• Recognise tax as a core architectural component of business;
• Realise critical interdependencies in finance and tax;
• Manage relevant data – organise, design and safeguard; and
• Invest in technology for efficiency gains and improved control.
Source: By Hentus Honiball (Tax Professional)



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