The global demand for tax management is expected to rise at a healthy CAGR of 11.3% per year to USD 21.1 billion in 2022, supported by the following:
| Attributes | Details |
|---|---|
| Global Tax Management Market Size (2022) | USD 21.1 Billion |
| Global Tax Management Market Size (2032) | USD 61.4 Billion |
| Global Tax Management Market CAGR (2022 to 2032) | 11.3% |
| USA Tax Management Market Size (2032) | USD 20 Billion |
| USA Tax Management Market CAGR (2022 to 2032) | 10.6% |
| Key Companies Covered | Avalara; Automatic Data Processing; Intuit; SAP; Thomson Reuters; Outright; Shoeboxed; SAXTAX; H&R Block; CrowdReason; Blucora; Wolters Kluwer |
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A law amendment is an act of adding, altering or omitting a particular part of a law in an attempt to make it more effective. It is expected that the amendment of tax laws will pose a challenge to solution providers because they will need to consult tax experts and update their existing users'/subscribers' software as well.
This will increase the price of the solution and decrease the company's revenue. In such cases, the solution providers had to make certain changes in their offerings to be able to serve these customers. Consequently, solution providers face several challenges after every amendment made by governments all over the world.
Several industries use blockchain technology, which stores information about health and property, bank transactions, and supply chain. It is used in aviation, automotive, agriculture, manufacturing, and banking.
Blockchain technology has several major advantages such as improved accuracy, decentralization, security, and transparency. The application of blockchain technology for tax compliance will add a shared blockchain technology between taxpayers and tax administrators. As a result, the current method of exchanging tax information occasionally will be replaced by a real-time method.
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Due to the increasing level of tax enforcement in the region, as well as the increasing use of tax management software, Asia Pacific is predicted to record significant growth in terms of revenue during the forecast period.
It is expected that the growth in the BFSI sector and the frequent regulatory changes in developing countries like India and China in the region will drive the growth in the tax management market in the region.
As an example, the Indian government began charging Goods and Services Tax in July 2017 at five different rates: 0%, 5%, 12%, 18%, and 28%. The GST tax calculation is quite complex, so there has been an increase in the adoption of tax management software to automate tax calculations, which is expected to augment the growth of the tax management market in the Asia Pacific since GST tax calculation is quite complicated.
With the acquisition of Transaction Tax Resources, Inc. in October 2020, Avalara, Inc. will be able to integrate the leading technology behind tax returns with trustworthy tax data, thus enabling Avalara to expand its existing product line, introduce new capabilities, and expand its reach to new markets.
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As per the Tax Management Market research by Future Market Insights - a market research and competitive intelligence provider, historically, from 2015 to 2021, the market value of the Tax Management Market increased at around 13% CAGR.
The rising amount of financial transactions over different verticals due to digitization, the complexity of the existing tax system, and heightened surveillance of tax administrators are the key factors driving the expansion of the tax management industry. Furthermore, the usage of blockchain technology is projected to generate several prospects for tax management companies.
Technological advancements have boosted information interchange and cut transaction costs, which has increased transaction volume. Due to the increased usage of mobile phones and tablets, it has become feasible for everyone to conduct financial transactions using their smartphones or tablets.
Furthermore, the increased usage of web-based e-commerce and banking services and solutions increases the volume of online transactions internationally. This rise in web-based transactions is expected to fuel demand for different tax administration systems for sales tax, GST, and service tax, which will drive market expansion globally.
Market growth for even more cost-effective tax filing solutions is also predicted to boost the global tax management industry's revenue growth in the coming years. According to Income Tax Department guidelines, a taxpayer, whether an individual or a corporation, must use the stated format when providing data of uncontested accounts.
Income-tax return submitting software may handle the pre-defined procedures by assessing the tax number. This strategy eliminates the need for taxpayers to consider mistakes or discrepancies.
Additionally, growing demands for solutions for easier tax record keeping is likely to fuel revenue growth of the tax management market. When it relates to preserving important tax documents, most firms rely on record keeping, which may be simplified by adopting tax software.
Businesses may also utilize cloud-based tax software to securely save tax data from prior years on the cloud. Using such services, businesses may also have fast access to critical tax information for any fiscal year. Growing demands for tax computation software with high precision and fewer mistakes are likely to drive revenue growth in the global tax management market in the upcoming years.
During the projected period, North America held the largest share in the global Tax Management Market with a market size of around USD 25 Billion. Due to the constant changes and restrictions in the local taxation system, the North American market has seen remarkable development in the use of tax software.
The region's taxation system's complexity, along with disparities in tax and employment legislation, is offering significant potential for software application developers and key suppliers to participate in the tax management software industry.
Regional software suppliers have begun collaborating with third-party developers to create API-based products to improve the taxes system. As a result, firms in North America are adopting innovative technology and channels to stay competitive and update at an exponential rate.
The United States is expected to account for the largest market share of USD 20 Billion by the end of 2032 with an expected CAGR of 10.6% by the end of 2032.
The constantly changing taxation climate has also made it critical for tax authorities and taxpayers in the USA to remain updated on variables impacting the company's tax responsibilities. The United States Tax Forum has evolved into the ideal platform for tax software suppliers to develop their user base in the area.
Many countries' development in this region has slowed, making it more important for tax proposals to appeal to businesses. However, tax administrations are projected to conduct more frequent and aggressive fiscal audits to generate more substantial revenues; hence, the need for different technologies is predicted to rise in the region throughout the projection period.
Tax management market revenue through the software segment is forecasted to grow at the highest CAGR of around 10.6% during 2022 to 2032. Tax management software makes it easier for businesses of all sizes to complete corporate tax filings.
Furthermore, the intricacy of the current taxation system, as well as the expansion of electronic payments on a larger scale, has opened new possibilities for key industry players to expand their offers.
Tax Management Software assists financial institutions and enterprises in analyzing the huge quantity of data generated by financial transactions and assisting firms in making decisions. Tax and customs agencies acquire data concerning Goods and Services Tax (GST) and Value Added Tax (VAT) payers through financial transactions.
Moreover, tax administrations are digitally processing and analyzing financial data derived from indirect taxation. This program includes tax administrators conducting VAT/GST audits using data pulled from taxpayer systems. As a result, the use of data analytics techniques to enhance eVAT/GST compliance is viewed as an emerging driver of tax management software market growth.
For example, in July 2017, Spain implemented the Immediate Requirement of Information Act, which permitted all taxpayers to transmit data connected to VAT bills in real-time.
The Cloud segment is forecasted to grow at the highest CAGR of around 9.9% during 2022 to 2032. To make storage and computation more mobile and decentralized and facilitate data backup and recovery, companies prefer to use cloud-based tax management systems.
However, security and privacy issues deter businesses from obtaining cloud-based services. However, the effectiveness of the services' security is being reported by third parties as the best and most complete.
Rapid advancements in cloud computing, with encryption as a chief focal point, and memory maintenance and support costs growing with the increase of on-premises techniques, will fuel the global market for cloud-based tax administration software.
Businesses are focusing on organic growth strategies such as product approvals and non-disclosure agreements. Acquisitions, partnerships, and collaborations are among the inorganic growth procedures seen in the company.
With increased demand in the worldwide industry, market players in the Tax Management industry are expected to benefit from growth prospects in the future. Some of the recent developments in the Tax Management market include:
Similarly, recent developments related to companies in Tax Management Market have been tracked by the team at Future Market Insights, which are available in the full report.
The global Tax Management Market is worth more than USD 18.9 Billion at present.
The value of the Tax Management Market is projected to increase at a CAGR of around 11.3% during 2022 to 2032.
The value of the Tax Management Market increased at a CAGR of around 13% during 2015 to 2021.
The increased quantity of digital transactions, the complexity of tax rules, and tax management providers' incorporation of blockchain technology are projected to affect the industry in the next years.
The market for Tax Management Market in the USA is projected to expand at a CAGR of around 10.6% during 2022 to 2032.
1. Executive Summary 2. Market Overview 3. Market Risks and Trends Assessment 4. Market Background 5. Key Success Factors 6. Global Market Demand Analysis 2015 to 2021 and Forecast, 2022 to 2032 7. Global Market Value Analysis 2015 to 2021 and Forecast, 2022 to 2032 8. Global Market Analysis 2015 to 2021 and Forecast 2022 to 2032, By Component 8.1. Software 8.2. Services 9. Global Market Analysis 2015 to 2021 and Forecast 2022 to 2032, By Organization Size 9.1. Large Enterprises 9.2. Small and Medium-Sized Enterprises(SMEs) 10. Global Market Analysis 2015 to 2021 and Forecast 2022 to 2032, By Deployment Mode 10.1. Cloud 10.2. On-premises 11. Global Market Analysis 2015 to 2021 and Forecast 2022 to 2032, By Vertical 11.1. Banking, Financial Services and Insurance (BFSI) 11.2. Information Technology (IT) and Telecom 11.3. Manufacturing 11.4. Energy and Utilities 11.5. Retail 11.6. Healthcare and Life Sciences 11.7. Media and Entertainment 11.8. Others (Real Estate and Construction, and Transportation and Logistics) 12. Global Market Analysis 2015 to 2021 and Forecast 2022 to 2032, By Tax Type 12.1. Indirect Tax 12.2. Direct Tax 13. Global Market Analysis 2015 to 2021 and Forecast 2022 to 2032, By Region 13.1. North America 13.2. Latin America 13.3. Europe 13.4. Asia Pacific 13.5. Middle East and Africa (MEA) 14. North America Market Analysis 2015 to 2021 and Forecast 2022 to 2032 15. Latin America Market Analysis 2015 to 2021 and Forecast 2022 to 2032 16. Europe Market Analysis 2015 to 2021 and Forecast 2022 to 2032 17. Asia Pacific Market Analysis 2015 to 2021 and Forecast 2022 to 2032 18. Middle East and Africa Market Analysis 2015 to 2021 and Forecast 2022 to 2032 19. Key Countries Market Analysis 2015 to 2021 and Forecast 2022 to 2032 20. Market Structure Analysis 21. Competition Analysis 21.1. Avalara 21.2. Automatic Data Processing (ADP) 21.3. Intuit 21.4. SAP 21.5. Thomson Reuters 21.6. Wolters Kluwer N.V. 21.7. Blucora 21.8. Sovos ShipCompliant 21.9. DAVO Technologies 21.10. Drake Software 22. Assumptions and Acronyms Used 23. Research Methodology
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