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A31503 | Pages: 403 | Charts: 68 | Tables: 219 |
The global tax advisory services market was valued at $34.6 billion in 2021, and is projected to reach $97.1 billion by 2031, growing at a CAGR of 11.2% from 2022 to 2031.
Analysis of financial and tax issues, formulation of solutions, and formulation of suggestions are all part of the tax advisory service, which is intended to give clients—from individuals to businesses—advice on taxation. A tax advisor assists an entity in converting personal and/or professional objectives into targeted action measures intended to improve the entity's tax status. Clients that use tax planning are better able to grasp how each financial choice will affect their taxes.
Increase in adoption of tax advisory services for reducing additional taxational costs and optimizing operations is driving the growth of tax advisory services market. In addition, digitalization in the business tax advisory services industry, penetration of high-speed internet, and automation of tax consulting processes are accelerating the tax advisory services market growth. However, risks of data breaches and cyber-attacks in an online income tax advisory services platform hamper the growth of the tax advisory services market. On the contrary, developing economies offer significant opportunities for tax advisory services companies to expand their offerings, owing to factors such as growth in income, rise in resource spending by SMEs, and technological advancements. Moreover, growth in developments & initiatives toward digitalized services is anticipated to provide a potential growth opportunity for the market.
The report focuses on growth prospects, restraints, and trends of the tax advisory services market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers; competitive intensity of competitors; threat of new entrants; threat of substitutes; and bargaining power of buyers on the tax advisory services market outlook.
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The tax advisory services market is segmented into Organization Size, Type and Industry Vertical.
The tax advisory services market is segmented into type, organization size, industry vertical, and region. By type, the market is differentiated into direct tax advisory and indirect tax advisory. The direct advisory is further segregated into income tax, corporate tax, property tax, capital gains tax and others. The capital gains tax is further segmented into long-term capital gain and short-term capital gain. Depending on organization size, it is fragmented into large enterprises and small and medium-sized enterprises. The industry vertical segment is segmented into banking, financial services, & insurance (BFSI), IT & telecom, manufacturing, retail & e-commerce, public sector, healthcare, and others. Region-wise, the market is analysed across North America, Europe, Asia-Pacific, and LAMEA.
[TYPEGRAPH]
By type, the direct tax advisory segment is estimated to acquire the highest share of tax advisory services market size in 2021. This is attributed to the increasing reliance of the individuals or group of individuals on tax advisory consultancies to pay off the taxes. In addition, in recent years, the direct tax collections are at record high. This is attributed to robust economic growth after the pandemic.
[REGIONGRAPH]
Region-wise, North America dominated the tax advisory services market share in 2021. This is attributed to the rising borrowing costs and geopolitical tensions in the region which encourage consumers to consult professional tax consultants.
The key players operating in the global tax advisory services market include Accenture Inc., Aon PLC, Bank of America Corporation, Citigroup Inc., CGI, Inc., Cognizant, CSC Consulting Services, CREDIT SUISSE GROUP AG, Deloitte, Goldman Sachs, JPMorgan Chase & Co., Morgan Stanley, Northern Trust Corporation, PwC, Wells Fargo, Tax scouts, and Taxfyle. These players have adopted various strategies to increase their market penetration and strengthen their position in the tax advisory services industry.
COVID-19 pandemic has a negative impact on the tax advisory services industry, owing to drop in demand for tax advisory services globally. However, tax advisory services providers have taken numerous steps to position themselves for the post-COVID future as they begin their recovery. Moreover, the COVID-19 pandemic increased the importance of digital transformation systems in tax advisory services. Technology-driven tax advisory services startups are increasingly offering clients digitized and long-term tax filing services through robo-advisors.
Tax advisory services are the best way to provide value for SMEs as it aids in managing their tax filing processes, tax structuring, tax legislation and regulations compliance to their businesses. Moreover, according to a recent Accounting Today survey, 78% of small businesses want an accountant who’s a trusted advisor.
Furthermore, during the COVID-19 pandemic, SMEs were experiencing lack of proper tax management strategies; therefore, some major banks collaborated to provide proper tax advisory services for SMEs. For instance, in August 2021, Gulf Bank collaborated with Balance Business Advisory, a Kuwaiti SME, to provide tax advisory services to entrepreneurs and SMEs as part of their continued commitment to their clients in this segment. This collaboration is rooted in the Bank’s strategy toward providing tax services to the SMEs sector. Thus, rise in demand for tax advisory services among SMEs is driving the growth of the tax advisory services market.
Integration of analytics, cloud, media and social media with business models is driving the growth of tax advisory services market. In addition, tax advisory firms are providing IT transformation services to businesses, banks and other organizations to overcome challenges such as rising stakeholder expectations and declining budgets. Such services include identifying critical technologies, setting an IT agenda, consolidating, standardizing and harmonizing IT solutions across business divisions in a cost-effective manner. Moreover, the digitalization in the tax advisory services has aided the consultants to use various advance tools such as AI prediction and ML in providing tax advises to the customers. This has resulted in providing effective and efficient services to the customers. For instance, in August 2022, Intuit, a global financial technology platform that makes TurboTax, QuickBooks, Credit Karma, and Mailchimp, announced Intuit Tax Advisor (ITA), a new, convenient insights tool for tax professionals to deliver tax advisory services. Intuit Tax Advisor seamlessly integrates with Intuit Accountant software, Lacerte and ProConnect Tax, to provide insights and strategies for the tax professional’s clients. Thus, the digitalization in tax advisory services is propelling the growth of the market.
The number of HNWIs are increasing across the globe owing to better financial management and correct investments. Moreover, given their substantial assets, high-net-worth households require additional services from financial advisors and wealth managers. Tax advisory services for HNWIs include tax filings and tax advice as well as help with trusts and estates and access to hedge funds and private equity firms.
Furthermore, around 13% tax advisor clients fall under the umbrella of high net worth. In addition, HNWIs are in high demand for tax advisory services as more the money, more work is required to maintain and preserve those assets. These individuals generally demand personalized services in estate planning, tax planning, and other. Thus, constant rise in global high-net-worth individual (HNWI) is propelling the growth of the market.
Key Market Segments
Key Market Players