Uncertainty in the macroeconomic environment persists, prompting CFOs and other finance leaders to drive more lean operations within their enterprises. Many are re-evaluating new technologies and skills that can perform specific processes at lower cost and higher efficiency.

Tax teams, for example, are facing a combination of internal and external pressures: on one hand, they must strive to reduce costs, while on the other, they must contend with an aging workforce, data and technology bottlenecks, and upcoming global tax regulatory changes—such asthe Pillar 2 minimum tax rules.

While striving to meet cost-reduction goals, finance leaders are also pushing tax teams to be more forward-looking. Emily VanVleet, a tax partner at Deloitte and leader of its US tax operations transformation practice, notes that this is why many of Deloitte's clients have begun developing "tax transformation roadmaps." She says that creating such a roadmap is crucial, as it ensures tax teams and finance leaders can collaborate efficiently to achieve corporate goals.

"For those tax teams that have already completed their roadmap, they can have more constructive conversations with the CFO around 'which investments truly deliver returns for the company,'" VanVleet said in an interview.

Pressing Pause

According to Deloitte's recently released"2025 Tax Transformation Trends" report, tax leaders today face a series of increasingly severe challenges. Among the tax and finance executives surveyed, 40% ranked "adapting to changing tax regulations" as one of their top three challenges over the next three to five years. Meanwhile, 35% considered "quantifying the tax impact under different scenarios" as a top-three challenge, and another 34% listed "accessing talented tax professionals" as a challenge.

Thus, current finance leadership faces a complex objective: to alleviate the cost-reduction pressures that have been "amplified" over the past few years and have not diminished amid current macroeconomic headwinds, while also preparing for tax regulatory changes such as Pillar 2 and the upcoming US tax reform, VanVleet said.

VanVleet observes a common scenario among clients: "In many cases, the CFO pressures the tax department to drive behavioral change and genuinely try to bring the tax operating model and tax cost structure closer to the levels they have already achieved in other parts of finance."

To reduce costs, finance leaders might consider downsizing the tax team. Because tax professionals are often highly specialized, the team "does appear to be relatively highly compensated" compared to other finance functions, VanVleet says. "So sometimes, that alone is enough to put the tax department on the CFO's radar."

However, this approach leaves critical skill gaps at a time when upcoming regulatory changes will only increase the demand for tax talent, VanVleet says. Similar to the accounting profession, the tax field faces an aging workforce; many experienced tax professionals are at a career stage where, facing austerity in tax and finance departments, they may choose to retire or shift to part-time work in other areas.

The Deloitte report found that 28% of respondents ranked "managing an aging workforce" among their top three challenges. According to the Big Four firm, the report is based on a survey of 1,000 tax and finance executives, as well as interviews with international tax leaders.

To navigate this complex environment, finance and tax leaders must have a clear understanding of their needs and goals. VanVleet says that for clients who have developed a tax transformation roadmap, "they have at least pressed pause, examined their processes, identified inefficiencies, and considered potential cost-saving opportunities if they adopted a different operating model or technology."

Data Quality and Reconciliation Remain a Focus

In this complex environment, tax and finance leaders are also seeking other ways to reduce costs. The Deloitte report shows that outsourcing has become a popular strategy, with 81% of respondents saying they will use outsourcing to cut costs in 2025, up from 69% in 2023. Automation technology has also drawn leadership attention, with 42% viewing it as a cost-reduction strategy, compared to 39% in 2023.

VanVleet says that introducing automation or artificial intelligence can help tax teams address their primary challenge—data. Large enterprises are likely to use multiple different systems; for example, handling multiple ERP, general ledger, and transaction systems simultaneously, "integrating all that data is a significant challenge," she says.

"There are still a lot of data quality issues, so tax teams spend a significant amount of time analyzing and reconciling data, trying to ensure they understand the story the data is telling," VanVleet says.

She believes generative AI has "enormous potential" in addressing such challenges. However, there is still some hesitation surrounding the technology and its potential drawbacks; currently, tax teams use the tool only for more basic tasks. Nevertheless, as a new entrant in the survey, "specialized AI skills" quickly jumped to the top of the list of capabilities tax leaders are most focused on. The Deloitte report found that 45% of respondents ranked it as the most needed skill over the next one to two years.