The Future of Tax Teams: Closing the Skills Gap

A study conducted in the UK highlights the growing skills gap, finding that around 20% of the UK workforce could be significantly underskilled for their jobs by 2030. Other data show that around one in ten job postings now requires at least one skill considered “new,” while in emerging market economies this share is roughly half as large. 

Notably, more than 50% of demand for new skills is linked to IT, where AI is becoming increasingly important, reflecting the role of AI and IT as general-purpose technologies that reshape multiple industries rather than a single sector. At the same time, sector-specific skills, including finance and taxation, are also rising in importance, showing that innovation is not only digital but also tied to domain expertise. 

This raises a critical question: does a skills gap exist among tax professionals, and how to close it so tax teams can fully adapt to the growing demands of increasing regulatory complexity and tax administration digitalization?

Core Skills Required in Modern Tax Teams

To identify whether the gap exists and how to address it, it is first necessary to understand what core skills are required for a tax professional. In general terms, these skills fit into three categories: technical skills, digital skills, and non-technical or people skills. 

Deep Technical Tax Knowledge 

Above all, deep technical tax knowledge is and remains essential, particularly in areas such as VAT, sales tax, GST, transfer pricing, and emissions trading systems (ETS) across sectors and jurisdictions. This includes expert-level knowledge of financial reporting and analysis and understanding of indirect tax rules and regulations, at both national and international levels. However, this expertise alone is no longer sufficient and must be complemented by strong digital and data capabilities. 

Data Literacy

When discussing data skills, AI is often the first association, but data literacy encompasses much more. Nowadays, tax professionals are increasingly expected to work with large datasets, automate repetitive compliance processes, and interpret outputs from tax technology platforms. Therefore, data analytics skills, including the ability to use tools like Power BI or advanced Excel modeling, are becoming standard expectations rather than niche advantages.

Interpersonal and Communication Skills

One of the non-technical skills becoming more important in the modern tech-driven working environment is soft skills. In a world where data is one click away, communicating complex tax issues clearly to non-specialists, collaborating closely with IT and finance teams, and contributing to strategic decision-making have become some of the most important tasks for tax professionals. 

The Emerging Skills Gap and Its Roots

Despite growing awareness of how tax teams must adapt to new ways tax administration operates and tax-related data is analyzed, interpreted, and communicated with government bodies, many tax teams continue to operate with skill sets that are rooted in traditional compliance-focused models. There are several reasons why the gap between current capabilities and future needs continues to widen.

One of the more apparent factors negatively impacting the skills gap is the slow adaptation of educational and professional training pathways. Education and training still predominantly focus on legal and regulatory interpretation, with limited exposure to data analytics and automation tools. Consequently, newly qualified tax professionals often lack the hybrid skills sets that modern tax functions require.

Another root cause is the fast pace of technological change. Governments across the globe are investing heavily in digital reporting systems, e-invoicing mandates, and real-time tax audits. Due to different approaches in implementing these technologies and compliance requirements, tax teams must respond with equally advanced digital capabilities. However, many organizations are reluctant to invest in upskilling or technology adoption.

Business Impact of the Skills Gap

Some of the most relevant consequences of the skills gap in tax teams include slower compliance cycles, increased reliance on spreadsheets, and higher administrative costs. However, the impact can be even broader when viewed through a strategic lens.

For example, if a company is growing or entering a new market, gaps in digital and analytical skills raise the risk of reporting errors, particularly as regulations become more complex and data-intensive. On the other hand, tax professionals with underdeveloped capabilities remain reactive, focusing primarily on compliance deadlines instead of acting proactively and extracting value from the tax data they have in front of them.

Finally, for large businesses, the limited ability of their tax teams may result in over-reliance on external advisors, which can increase costs and further reduce internal knowledge retention.

How to Close the Skills Gap

Closing the skills gap requires a multi-layered approach. Investing in the professional development of tax team members is one of the most important steps toward developing a team capable of adapting promptly to modern tax regimes. Tax professionals who have a clear and structured path for building digital literacy, data analytics capabilities, and familiarity with automation tools are in a better position to upskill than those left on their own.

Regarding the automation tools, enabling team members to use AI might seem like a straightforward solution to many of the problems presented. But the way AI is introduced matters as much as the decision to adopt it. A recent MIT Media Lab study showed AI may support learning and creativity more effectively when used after independent thinking rather than as the initial source of content generation. 

This further underscores the need for fostering and developing adaptability, critical thinking, problem-solving, and continuous learning among tax team members and tax professionals to reduce the skills gap. In other words, domain expertise and people skills must come first, digital skills, and particularly AI, build on that foundation rather than replace it.

Source: IMF, Grant Thornton, KPMG, MIT Media Lab, PwC, Deloitte