In today’s data-rich environment, it’s critical to focus on how data can be leveraged to help companies achieve growth and comply with government tax data mandates.
Due to its potential to be mined and monetized to create new value and revenue streams for businesses, data has been crowned king and is frequently referred to as the new “gold” or “oil.” Data continues to grow in value and size, and according to IDC’s recent report, “Amount of Data Created, Consumed, and Stored 2010-2025,” the amount of data worldwide will reach more than 180 zettabytes by 2025.
Big data is being used by many organizations today to uncover essential insights across industries. The true value of data comes from its ability to provide enterprises a competitive edge by enabling them to understand their consumers better, streamline business operations, find and capitalize on new business opportunities, and detect and eliminate inefficiencies.
Governments are now using big data in the same way as other industries. New Continuous Traction Control (CTC) rules are being issued by regulators worldwide, allowing them to connect with enterprises’ data stacks in real-time. Authorities can get information about business activities that are useful for taxation and other purposes. On the other hand, failure to comply with these regulations may jeopardize business operations.
The world of retroactive audits is turned on its head by CTCs. CTCs provide governments instant access to authenticated transaction source data, enhancing visibility and expediting tax collection efforts. Instead of relying on businesses to submit returns and historical evidence of transactions, governments can now collect taxes faster.
Implementing CTCs is simply one element of a larger digital transformation strategy in which governments want to electronically receive all data that can be lawfully accessed for audits. However, this also brings three significant difficulties that, if companies do not adequately manage them, can have a detrimental effect on their business.
Theoretically, having more data should be better, but due to poor data quality, businesses cannot utilize it to its full extent. The data of most companies do not meet even the most basic data quality standards. And this can be expensive given that businesses lose millions of dollars annually due to poor data quality.
The main issue is that poor data quality is often overlooked until it is too late, which leads to missed business opportunities, increased costs, or in some situations, non-compliance with tax regulations. Companies must monitor their data quality levels and improve them to lower operational and financial risks to maximize revenue.
Hurdles to Data Integration
Integrating data from many sources is one of the most significant issues for many companies. The issue is that distinct organizational functions, such as billing, procurement, payroll, and sales, are managed by disparate tools. And to present a unified view of the company, these disparate functions must all be merged into a single source of truth.
Different structures, formats, and data types are pulled from various systems, leading to the need for different tools. Additional steps are then needed to manually format, validate and rectify the data, which can waste a lot of time and resources and is not scalable as the company and the data it produces and consumes increases.
Efficiently Scaling Big Data
Today, CTCs are implemented in many countries. Now, the government has direct access to business data stacks. Many organizations are tempted to deploy a local solution provider to comply with such mandates country-by-country and keep up with the continuous changes in a certain jurisdiction.
While localized solutions can help fix specific issues for that region, using this strategy can be expensive and unreliable. Multiple local systems are challenging to have a consistent view of the global compliance posture and are incredibly expensive to construct, maintain and monitor.
In today’s data-rich environment, it’s critical to focus on how data can be applied to help the organization comply with governmental tax data regulations and how it can be used to benefit the business. IT leaders can maintain compliance with current laws and leverage integrated, high-quality data to put their organization on a path to competitive success by creating a global strategy for handling CTC mandates.