In indirect tax, the question isn’t if things change, it’s how fast. Today, tax teams have to keep up with real-time rules, global complexity, and AI reshaping everything.

That may leave you asking: What will the indirect tax function look like in five years? In ten?

AI is transforming business. Tax authorities are going digital at record speed. Indirect tax sits at a crossroads—compliance isn’t enough anymore. The pressure is on to do more, move faster, and deliver value beyond filing deadlines.

But here’s the good news: this isn’t the first time this has happened.

After 20 years working in tax and finance, and partnering with hundreds of indirect tax teams around the world, I’ve seen clear patterns that show where I believe the function is headed— and how forward-thinking teams are getting ahead.

If you're looking for a north star to guide your tax team through the next decade of change, this is it.

TL;DR: indirect tax is being transformed from a cost center into a strategic force for growth. And Fonoa is here to help support tax teams in improving their company’s bottom line.

Tax is on the same path as payments and FP&A

First, let’s set the stage. Over the past two decades, core business functions like payments, FP&A, and finance have shifted from being support roles to becoming strategic drivers of business value. 

They’ve done this by automating tasks, integrating more deeply into the business, and adopting new tech. We believe the indirect tax function—like VAT, GST, and sales tax—is next in line.

What changed for those other functions? They:

• Automated time-consuming work
• Brought siloed teams into core operations
• Got better at managing risk before it became a problem
• Started thinking of themselves not just as cost centers, but as value creators

Tax teams can do the same. 

Tax success is no longer just about filing reports and avoiding fines, it’s becoming a source of real business insight and competitive advantage.

The pressure for tax change sparked by real-time shifts

So why does this matter for indirect tax? And why now?

Indirect tax has long been about compliance: file on time, charge the right rate, and don’t get audited. 

But global tax authorities are demanding more.

Today, over 100 countries require real-time tax reporting or e-invoicing. Latin America and Europe are leading the charge, with Brazil, Mexico, and the EU’s upcoming VAT in the Digital Age redefining compliance to be instant data sharing with governments.

Companies now have to operate in two worlds: traditional filings and real-time reporting. Manual processes just can’t keep up.

The upside? These pressures are a great reason to modernize. Getting your systems in shape for real-time tax rules also gives your team more time to focus on higher-value work.

3 traits of a modern indirect tax team

These pressures leave tax either strained under inefficiencies or evolving into a radically different model to stay ahead. 

So what does it take to actually get ahead of these changes? Here’s what separates a future-proofed tax team from one lagging behind:

1. Technology and data is at their core

Future-proofing indirect tax starts with solid data. That means tight coordination with engineering, finance, and IT to ensure the right inputs, like product codes, tax IDs, invoice dates, etc.are captured cleanly and consistently.

To get there, many tax teams are implementing modern tax engines that calculate tax automatically and accurately at scale. Tax Engine was built specifically for global complexity, without relying on the brittle, rule-based logic most legacy systems still use.

Automation helps take routine work off your plate, from preparing returns to reconciling accounts to compiling audit documentation, so the team can focus on the strategic stuff.

AI pushes that a step further. Fonoa’s machine learning models help surface anomalies, flag risk patterns, and make sense of emerging tax rules as they evolve across different jurisdictions.

And as real-time reporting and e-invoicing mandates expand, staying compliant means being integrated. Tax can’t sit outside the flow of operations—there’s no buffer for post-processing anymore. You need to get it right the first time.

2. They work towards a mission beyond compliance

Modern tax teams aren’t just return-filing machines.

Consider the value tax can drive:

• Improve cash flow by choosing smarter import locations or leveraging tax warehousing
• Shape pricing strategy with tax insights on margins and market entry
• Support new business models, like subscriptions or bundling, by navigating tax complexity without holding up innovation
• Claim incentives (yes, free money) for R&D, exports, or green initiatives that too often go unclaimed

And when tax is plugged into risk management, you’re not just reacting to audits, you’re preventing them.

3. They change how tax works in the business

Many companies are centralizing their indirect tax teams, setting up global centers of excellence to standardize processes and reduce duplication. This makes it easier to apply consistent rules and invest in better tools.

But centralization doesn’t mean isolation. A “hub and spoke” model works well here: A central team owns strategy and tech, while regional specialists handle local nuances.

Tax also needs to work across teams, especially with engineering, finance, supply chain, and product. As e-invoicing links tax to billing and logistics, it becomes everyone’s responsibility.

Strong governance is key. Who owns tax data? Who updates tax codes in your systems? To stay ahead, you need to define these roles in your org clearly. 

And as the team’s responsibilities evolve, bring in new skill sets, especially tech-savvy professionals who understand both tax and software.

Practical advice to modernize your own tax team

If you're serious about future-proofing your indirect tax function, strategy alone isn’t enough. The transformation requires practical shifts in technology, mindset, and operating model. Here’s where to focus your energy:

Adopt key habits from other teams

Indirect tax doesn’t need to reinvent the wheel.

Consider and learn from other teams that have already paved the path to becoming more strategic:

• FP&A uses scenario planning to guide decisions, not just explain them
• Audit and compliance rely on alerts and dashboards to spot issues early
• Treasury syncs with payments to make processes real-time and reduce delays
• Strategic finance builds KPIs that tie directly to business goals

These aren’t just tricks, they’re habits. And they’ve helped these functions earn a seat at the decision-making table. Tax should be next.

Start small with highest-impact areas

Modernizing tax doesn’t have to start with a full transformation. Begin with the areas that bring fast results on cash, cost, and control.

• Fix tax in quote-to-cash flows to reduce disputes and speed up payment
• Validate vendor tax in procure-to-pay before money leaves the business
• Keep a live audit file so audit response time drops from weeks to hours
• Automate refund claims to improve recovery speed and predictability
• Clean up master data for products and customers—consistency matters
• Flag tax incentives like green product breaks before they go unused

Begin here, and you’ll lay the groundwork for a smarter, more strategic tax function without waiting for a multi-year roadmap.

A new vision for indirect tax

Change won’t happen overnight, but the path is clear. Many tax teams are already adopting e-invoicing, hiring tech-savvy talent, and becoming more involved in business decisions. Just as CFOs once championed FP&A’s rise, heads of tax now need to lead this transformation.

Set a clear vision. Invest in smart tools and people. Reorganize around value, not just compliance. And make sure tax has a seat at the table when business decisions are made.

In the end, the goal is simple: to turn indirect tax from a back-office cost into a forward-looking, tech-powered, value-creating business partner. A team that ensures compliance—of course—but also enables expansion, improves margins, and delivers insight that helps the business win.

If the past two decades transformed payments, treasury, and finance, the next decade belongs to tax. Now is the time to lead the change.

To get started, check out our guide on how to pitch indirect tax automation to your CFO and make the business case for turning tax into a strategic lever. Then, talk to the Fonoa team to see how our platform can help you automate tax workflows end-to-end and deliver real bottom-line value.