Sovos President: 2024 Has Been ‘Stark Realization’ for Businesses

Companies need a long-term strategy when it comes to tax and compliance so that no one event or outside factor can disrupt operations, Sovos President of Revenue Alice Katwan writes in a new PYMNTS eBook, “Beyond the Horizon: How to Identify Unexpected Threats That Could Impact Your Business.”

As a global tax and compliance solutions provider, dealing with constant change and uncertainty is a mainstay of our business. Everything from geopolitical issues to the current state of the economy have the potential to inspire, inform or disrupt change. As I look forward to the latter half of 2024 and beyond, I expect this trend to not only continue, but likely accelerate.

Looking at the global marketplace holistically, there are a number of factors likely to drive action by regulatory authorities between now and the turn of the year. In the U.S. we are dealing with market uncertainty, talk of an impending recession and higher prices, all on the cusp of a presidential election. Internationally, we are witnessing geopolitical flare-ups that are likely to impact global commerce, leading to supply issues and cost fluctuations.   

In response, governments and tax authorities are nearly certain to react in an effort to balance the need for continuous revenue while providing relief to businesses and citizens who are experiencing economic hardships. This is where things tend to get extremely complicated in our business as many of these efforts will be short-term stopgaps with potentially long-lasting tax ramifications.

This is all taking place in conjunction with the ongoing wave of technology changes we are experiencing globally. The way in which governments collect revenue has changed significantly in recent years and the first half of 2024 was a stark realization for many businesses as they were confronted with these changes head on. Gone are the days of remittance after the fact; today, most governments are requiring real-time reporting and adherence to tax obligations. These effects will continue to be felt in the second half of this year.

Finally, I’d be remiss if I didn’t talk about the influence that artificial intelligence (AI) is having on our industry. While we like to refer to AI as more evolutionary than revolutionary in the world of tax and compliance, there is no denying its impact and importance. Like many aspects of business, tax tends to be a copycat function. When governments are successful in implementing new mandates and standards, others are sure to follow closely behind. AI is expediting this process and using predictive analytics to anticipate changes has become an essential part of our business.

While I have identified several forces for change in the coming months, it’s important to note that for any business conducting commerce across multiple countries and jurisdictions, the continuous evolution of the tax landscape has become the norm. This is why we advise customers to have a long-term strategy when it comes to tax and compliance so that no one event or outside factor can disrupt your business operations.

There will always be changing conditions that are beyond your control and that will influence your compliance posture. What you can control, however, is how you choose to address your compliance readiness.