New BDO Survey Points to the Rise of the Tax Strategist

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After a year of economic uncertainty, a clear trend is emerging: Tax practices are beginning to have a bigger strategic impact on their enterprises. The recently released 2023 BDO Tax Strategist Survey revealed that a significant number of practitioners (29%) are taking on a more strategic role when key business decisions are made, and their involvement may drive more positive business outcomes.

For the past several years, BDO has surveyed tax executives across the United States to take their pulse on the tax landscape for the coming year. Practitioners typically shared their tactical approaches to legislative changes in tax policy, how they manage the tax consequences of their company’s approach to ESG initiatives, and their investments in technology. While these remain areas where practitioners focus heavily, we are seeing a measurable difference in the role tax practitioners play.

The difference between Tax Strategists and Tax Tacticians

As a result of this new dynamic, we broke down this year’s survey respondents into two categories: Tax Strategists and Tax Tacticians. Both make important contributions to their organizations, but those who fall into the Strategist category are better positioned to impact the bottom line.

For example, Tax Strategists report being highly involved in strategic business decisions when it comes to matters like M&A, ESG strategy, and business restructuring. In fact, 84% of Strategists report having a strong understanding of the tax consequences of ESG policy (compared to just 29% of Tacticians). And while 54% of Tacticians are actively upgrading technology in response to a more deeply funded IRS, 81% of Strategists view a tax technology upgrade as essential to reduce errors. What’s more, while 64% of Strategists said they are helping their organizations prepare for a significant increase in tax liability, just 16% of Tacticians were similarly focused.

Impact on the future of tax

Many tax practitioners would surely agree that, for too long, the value of the tax function has primarily been measured through the lens of tax liability. But a real change is underway. We see greater numbers of tax professionals contributing tax perspectives on business operations, including cash flow, technology, ESG strategies, and supply chain risks. And, in many cases, they now have “a seat at the table” when those issues are discussed.

So, what’s the path forward? Practitioners need to keep taking a total tax approach that aligns with business opportunities and safeguards against threats. Many are already doing so, and as a result, members of the C-suite are taking notice and seeking the opinion of tax professionals before making critical business decisions. The organizations that see the greatest results are the ones where that is the norm and not the exception.

Tax departments that still focus on tactical outputs will need the personnel, budget, technology, and access to important datasets across their entire company to become more strategic business drivers. Our 2023 BDO Tax Strategist Survey offers a view into the actions the tax function can start taking today to elevate its strategic value.

If you’re still stuck on the tactical side of tax, you’re not alone. BDO identifies opportunities that can help you make a more meaningful difference to the business. Contact us to discuss how your tax practice can take a more strategic tax approach and help your organization thrive.