EY report indicates CFOs and tax leaders innovating with AI to manage mounting geopolitical turbulence, talent shortages and regulatory developments

• 81% of organizations plan to make business changes - like updating supply chains - within two years, up 20 percentage points from last year.
• Nearly nine in 10 (86%) say leveraging data, GenAI and technology is a top priority.
• Leaders expect AI to free up 23% more budget for strategic activities.

The latest EY Tax and Finance Operations (TFO) Survey reveals tax and finance leaders are innovating with generative AI (GenAI) and agentic AI to future-proof their operating models to contend with unprecedented challenges, including geopolitical disruption, evolving trade and tariff policies and talent shortages.

The survey of 1,600 chief finance officers (CFOs), senior finance and tax leaders across 30 jurisdictions and 22 industries highlights a transformative shift in how tax and finance functions are adapting to a constantly changing environment.

Transforming amidst disruption

Amidst this turbulence, more than eight in 10 (81%) responding organizations are already making moderate or significant changes to their business operations, including supply chains, over the next two years. An increase of 20 percentage points compared with the last 12 months.

Stuart Lang, EY Global Tax and Finance Operate Leader, says:

"Disruption is now constant and increasingly complex. Tax and finance leaders are embedding agility into their core operating models and need to adopt an always-on approach to dealing with new technology, regulatory and geopolitical shifts."

The survey further finds that the implementation of Pillar Two global minimum taxes is the most significant legislative and regulatory change impacting organizations (81%) surpassing tariffs, country-level tax reform and e-invoicing. Eighty-five percent of those surveyed say their tax liability overall will increase because of Pillar Two. Despite the scale of these changes, only 21% say they are very prepared to comply with Pillar Two reporting requirements.

The AI and data imperative

Eighty-six percent of tax leaders surveyed are prioritizing leveraging data, GenAI and technology to drive innovation, insights, predictive analytics and automated reporting. Respondents are also increasingly confident in artificial intelligence's (AI) potential to enhance the effectiveness of tax and finance functions by 30% over the next two years and unlock 23% more budget for reallocation to strategic, high-value activities.

Forty-four percent of respondents say the inability to execute on a sustainable plan for data, AI and tech is their biggest barrier to delivering their tax function's vision. Over half (51%) of tax and finance functions are still in the early stages of data management maturity, significantly impacting AI implementation.

As a result, many are still struggling to develop their own solutions, and 78% of respondents say working with a third-party provider with deep AI capabilities in the coming two years will moderately or significantly benefit their tax function.

Marna Ricker, EY Global Vice Chair - Tax, says:

"In the tax world, data is queen - especially when effectively paired with AI. However, without the right foundations, its true potential remains out of reach. In the tax function of the future, clean, organized and accessible data must work hand in hand with AI - seamlessly integrated to maximize efficiency and free up time to focus on the strategic tasks that really move the needle."

Building agile, AI-ready teams to meet the talent challenge

Generative and agentic AI is also reshaping the tax workforce, which faces a plethora of challenges. Sixty-one percent of respondents expect the retirement of senior tax professionals to significantly impact their functions, while 66% say fewer new accountants entering the profession will be detrimental to meeting talent needs. Tax professional respondents are spending 53% of their time on routine activities and would like to slash that by more than half to 21%. Conversely, they'd like to more than double the amount of time they spend on higher-value specialized tasks.

Centering AI in workforce transformation is crucial for bridging this gap and creating agile, future-ready tax and finance teams. Respondents are investing and reskilling teams: 73% are prioritizing the hiring of data scientists and tax technology experts, while 89% are investing in upskilling and reskilling existing staff. Respondents are also increasingly sourcing external expertise (83%) and focusing on building an AI-literate workforce.

Dave Helmer, EY Global Managed Services Partner, EYEA LLC, says:

"Tax and finance functions need a new breed of professionals who can link judgment, critical thinking, transformation, and data and technology with excellent tax technical skills.The workforce of the future will be built on teams that can unlock the power of innovation, seamlessly integrating new technologies to deliver strategic value where it matters most."

For more information, please visit: ey.com/tfosurvey

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