Tax Management Software Global Market Report 2024

Tax management software is a computer program designed for centralized tax configuration, management, and reporting within enterprises. It works in conjunction with other financial modules to aggregate tax information from diverse financial documents into a unified repository, facilitating the generation of tax-related reports. This software also interfaces with financial management modules to accurately calculate taxes for every transaction, aiding in the control and mitigation of tax-related transactions.

The main components of tax management software comprise software and professional services. In the realm of computing, software encompasses instructions, data, or programs used to operate computers and execute specific tasks, contrasting with hardware, which pertains to the physical aspects of a computer. The term 'software' is broad and encompasses applications, scripts, and programs that run on devices. Tax management software addresses various tax types, including both direct and indirect taxes. Deployment options include on-premises and cloud-based solutions, catering to enterprises of different sizes, such as large enterprises and small-medium enterprises. Its applications span various verticals, including BFSI, healthcare, retail, manufacturing, energy and utilities, among others.

The tax management software market research report is one of a series of new reports that provides tax management software market statistics, including tax management software industry global market size, regional shares, competitors with a tax management software market share, detailed tax management software market segments, market trends and opportunities, and any further data you may need to thrive in the tax management software industry. This tax management software market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The tax management software market size has grown rapidly in recent years. It will grow from $19.83 billion in 2023 to $22.18 billion in 2024 at a compound annual growth rate (CAGR) of 11.8%. The growth observed in the historical period can be attributed to several factors, including the challenges posed by complex tax regulations, the ongoing process of digital transformation, the increasing trend of globalization and cross-border transactions, the pursuit of efficiency and cost savings, and a heightened focus on ensuring data accuracy in tax-related processes.

The tax management software market size is expected to see rapid growth in the next few years. It will grow to $35.1 billion in 2028 at a compound annual growth rate (CAGR) of 12.2%. The anticipated growth in the forecast period can be attributed to factors such as heightened security measures, a focus on customization and scalability, seamless integration with existing systems, and a commitment to ensuring data accuracy and integrity. Major trends expected during this period include an emphasis on collaboration and workflow efficiency, an increased focus on data security, continued emphasis on customization and scalability, integration with ERP and accounting systems, and the incorporation of user-friendly interfaces and user experience (UX) design.

The anticipated increase in online digital transactions is set to drive the growth of the tax management software market in the future. Governments, aiming to enhance tax compliance and revenue collection for public goods and services, are increasingly digitizing their operations and embracing online transactions. This approach ensures the effectiveness and sustainability of tax reforms, facilitating proper taxation of the digital economy and reducing compliance barriers. For example, in the financial year 2021-2022, digital payments in India witnessed a 33% year-on-year increase, totaling 7,422 crores ($933 million), compared to 5,554 crores ($698.24 million) recorded in FY 2020-21. Consequently, the surge in online digital transactions is fostering the demand for tax management software, driving market growth.

The rise in automation and digitization within tax processing is expected to be a key driver for the growth of tax management software. Automation streamlines tax-related procedures, boosting accuracy and efficiency, leading to resource and time savings and cost reductions. Real-time updates ensure compliance with evolving tax regulations, and data analytics empower businesses with valuable insights to optimize tax strategies, identify credits, and maximize deductions. Integration with other financial systems facilitates seamless data sharing, simplifying tax filing and report generation. For example, the Internal Revenue Service (IRS) collaborated with IBM to digitize the paper tax return intake process for tax years 2020 and 2021. This initiative allowed for remote scanning, validation, and processing, showcasing the role of automation and digitization in tax processing and driving the growth of the tax management software market.

Technological advancement stands out as a prominent trend gaining traction in the tax management software market. Key companies in this sector are actively developing technologically advanced products to solidify their market positions. An illustrative example is the cloud-based CCH AxcessTM Validate expert solution introduced by Wolters Kluwer N. V. in 2021. Leveraging blockchain technology, this solution expedites banking confirmations for CPA firm auditors, offering simplicity, speed, and trust in the audit process. Such technological advancements contribute to smoother and more time-efficient operations in tax management.

Major companies operating in the tax management software market are concentrating on creating new automated tax compliance solutions, aiming to gain a competitive advantage. Automated tax compliance involves adherence to laws, regulations, and requirements related to tax filing, reporting, and payment. Avalara, Inc., a US-based software company, launched Avalara Property Tax in February 2023. This digital business solution enhances tax compliance for both real and personal property taxes, enabling efficient management of property tax requirements. With a focus on reducing errors, saving time, and promoting compliance, Avalara Property Tax provides scalability and customization to meet diverse business needs.

In April 2021, Avalara Inc. acquired DAVO Technologies LLC, aiming to support DAVO teams and products in critical areas such as small business compliance requirements. This strategic move aligns with Avalara's goal of becoming the universal cloud compliance platform for businesses of all sizes. DAVO Technologies LLC specializes in helping emerging small businesses automate daily and ongoing sales tax requirements.

Major companies operating in the in the tax management software market report are Avalara Inc., GoDaddy Operating Company LLC., Shoeboxed Inc., SAXTAX Inc., H&R Block Inc., CrowdReason LLC, Drake Software, Bolt, Beanstalk Data LLC, Avantax Wealth Management, TaxSlayer LLC, Wolters Kluwer N. V., Intuit Inc., Sovos Compliance LLC, Sailotech Private Limited, Vertex Inc., Paychex Inc., TPS Unlimited Inc., Thomson Reuters Holdings Inc., Automatic Data Processing Inc., AccurateTax Inc., Bloomberg Industry Group, Corptax Inc., Taxware Systems Inc., Xero Limited., The Sage Group plc., TaxCloud LLC.

North America was the largest region in the tax management software market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the tax management software market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa

The countries covered in the tax management software market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.

The tax management software market consists of revenues earned by entities by providing tax management software for direct tax and indirect tax. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified)).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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