Technology Record - Issue 22: Autumn 2021

72 www. t e c h n o l o g y r e c o r d . c om I NT E R V I EW C omplying with tax regulations is an enor- mously complicated yet crucially impor- tant responsibility for any business. For domestic companies, this is difficult enough, as they look to navigate the complexity of the many different tax rules that are in force across a single country. For those operating internationally, this task only becomes more daunting. “Here in North America, there are 15,000 dif- ferent jurisdictions and at least that number of tax regulations,” says Greg Chapman, senior vice president of business development at Avalara. “This means that just understanding what the right tax rate is in a particular area is massively complex. There’s also been an immense amount of legislation worldwide over the last few years which has changed tax significantly. Businesses are expected to know this and accurately pay their taxes wherever they are in the world, and there’s a lot of downsides for getting it wrong.” Traditionally, the answer to this complexity would have been a dedicated tax department, whose sole purpose is to ensure that all tax reg- ulations are complied with appropriately. For the largest businesses this approach remains an option, but for small and medium-sized organ- isations it represents a daunting investment that can leave them less competitive. The answer to this dilemma comes in digital transformation and automation, says Sanjay Parthasarathy, chief product officer at Avalara. “I identify three fundamental areas of value in automating tax compliance,” says Parthasarathy. “One, you can grow your business around the world without having to be a tax expert. Two, you don’t need a large, expensive tax depart- ment, which is especially valuable if you’re a small or medium-sized business. And finally, you’re managing risk. If you fail to file adequately you can face serious consequences and having a specialist ensuring that you comply with regula- tions helps to reduce that risk.” “It’s a changing world,” says Chapman. “Covid has only exacerbated the existing trend. The new norm is digital payments, where people can always access and track their money. That’s where the digital approach to tax really comes into play.” Greg Chapman and Sanjay Parthasarathy of Avalara share how cloud-based, digital solutions can help companies navigate the complex world of tax regulations Making tax simple BY A L E X SM I TH