Most CFOs in India see Generative AI as game-changer for tax functions: EY Report

Generative AI (GenAI) is poised to transform tax operations in India, with 94% of CFOs and finance leaders convinced of its potential to significantly enhance effectiveness, according to EY’s Tax and Finance Operations (TFO) Survey 2024. This marks a dramatic rise from just 19% in 2023, reflecting a growing embrace of advanced technology in finance.

Globally, 87% of leaders share this optimism, underlining GenAI’s potential to revolutionise tax functions worldwide. The survey, based on insights from 1,600 leaders across 32 countries and 18 industries, including 70 Indian CFOs and tax executives, paints a picture of both progress and challenges in adopting this technology.

In India, 14% of tax leaders have already initiated pilot projects or strategies for GenAI adoption, with another 47% actively exploring its capabilities, well ahead of the global average of 40%. EY India’s Digital Tax Leader, Rahul Patni, emphasised GenAI’s potential, saying, “It enables tax professionals to move beyond routine tasks like document review and data cleansing, fostering focus on strategic priorities.”

However, significant barriers remain. A lack of skilled talent and limited understanding of GenAI’s applications were cited by 44% of respondents. Additionally, 46% reported spending excessive time on routine tasks such as tax return preparation, which they believe should occupy less than 25% of their workload.

Jitesh Bansal, EY India’s Tax and Finance Operate Leader, highlighted the growing strain on tax teams amid mounting regulatory demands, urging a shift towards integrating tax expertise with data and technology skills to meet evolving challenges.

This evolving tax landscape highlights the urgency for Indian firms to invest in technology and upskilling to remain competitive.