Businesses Face Growing Tax Compliance Challenges

Managing tax compliance has been a difficult job for companies around the world, and as per the latest benchmarking report from SAPinsider, ERP data has now been identified as the most important element of tax compliance. Because of the strict tax compliance policies imposed by the government along with the real-time reporting and e-invoicing process, companies have understood the importance of keeping their ERP data accurate.

The benchmarking report has been created based on the results of a survey carried out between February and June 2026. The benchmarking report is prepared on the members of the SAPinsider community who are from the tax, finance, IT, and executive departments.

ERP Data Quality Drives Compliance Success

According to the findings of the study, the ERP system is used by firms in managing tax codes, categorizing of products, customer/supplier information, jurisdiction mapping, exemptions, and document flows. In case of inaccuracy and inconsistency of this information across various systems, firms may find it difficult to cope with regulatory changes or make use of new technologies.

The main finding of the study is that information concerning taxes should be standardized and governed to enable firms to be certain about the automation of their tax processing and adoption of artificial intelligence technology. This is because, in the past, taxes were treated as an independent process.

Automation Remains the Top Priority

According to the findings of the study, automation is the highest-ranking strategy among tax teams in the next two years. About 41% of respondents mentioned automation of repetitive tasks as their main goal before AI.

The study implies that companies understand that automation must go before artificial intelligence implementation. It is necessary to have proper data, process standardization, and good governance before using artificial intelligence.

AI Adoption Continues to Grow

Artificial intelligence is becoming increasingly significant when it comes to tax management as 42% of respondents mentioned AI usage as one of the key trends influencing tax strategy from 2026 to 2028. Nonetheless, according to the report, there are many firms that continue exploring opportunities associated with AI as opposed to implementing it in a production environment.

AI technology is seen as a way to increase efficiency provided that the organization has well-developed data management processes and up-to-date ERP environment.

SAP Platforms Become Central to Tax Management

Many enterprises are beefing up their SAP environments to enhance compliance efforts. One-half of the respondents are planning to utilize SAP S/4HANA embedded analytics for tax and compliance projects in the next 24 months. In the meantime, 42% are investing in SAP Document and Reporting Compliance, and 34% are expanding SAP Business Technology Platform (SAP BTP) utilization.

This is a clear indication that enterprises would rather use integrated platforms than disjointed software applications.

Third-Party Tax Tools Still Play an Important Role

Another trend identified by the survey is that tax engines offered by third parties still provide support for many companies. The Vertex and Thomson Reuters ONESOURCE both had 37% adoption rate from the survey participants along with others.

Nevertheless, it should be noted that there is a problem for some businesses where they do not know what kind of tax systems they are using. This can cause problems with meeting regulations and modernizing their systems.

Organizations Must Strengthen Their Tax Technology Strategy

As per the SAPinsider poll, managing taxes in the modern era means more than meeting deadlines. Companies need accurate ERP data, standard processes, automation, and governance in order to prepare themselves for new regulatory requirements.

In light of the growing trend of companies leveraging artificial intelligence, real-time reporting and mandatory use of e-invoicing worldwide, it is evident that developing strong ERP-based tax architecture now would help in coping with compliance issues in the future.