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Niklas Elofsson and Vsevolod Konyshev from KPMG Sweden discuss how tax functions can effectively manage complexity and create long-term value through structured transformation strategies. They emphasize that "reactive measures are insufficient" in the face of increasing regulatory demands and resource pressures. The authors outline six key areas for successful transformation: people, governance, process, data, technology, and the tax delivery model. They advocate for a strategic assessment of current capabilities to identify strengths and weaknesses, followed by a roadmap prioritizing impactful initiatives. Leveraging data and technology is crucial, with a focus on establishing reliable data sources and integrating various tools. Additionally, aligning people and processes with clear governance and change management strategies is essential for success. They conclude that integrated transformation is vital for reducing compliance costs and enhancing the tax function's strategic value.

 

International Tax Review

President Donald Trump proposed on Sunday that his tariffs could lead to reduced income taxes for individuals earning less than $200,000 annually. He said: “When tariffs cut in, many people's income taxes will be substantially reduced, maybe even completely eliminated.” However, economists have raised doubts about the feasibility of this claim, as the tariffs have already caused significant disruptions in the global economy. Mr. Trump's assertion that tariff revenue could replace income taxes has sparked public concern regarding his economic strategy. "A full replacement is absolutely, mechanically impossible. The math just doesn't work,” said Erica York, vice president of federal tax policy at the Tax Foundation, a center-right think tank. “If you tariff everything from everywhere, you’re going to get revenue generated,” said Keith Maskus, a professor emeritus of economics at the University of Colorado, Boulder and specialist in international trade analysis. “But the scale of it just isn’t big enough.”  

 

USA Today

Bloomberg Tax

The Hill

CNBC

A bi-annual Federal Reserve survey of potential risks to the U.S. financial system is topped by growing risks around global trade, general policy uncertainty, and the sustainability of U.S. debt. "Concern over changes to trade policy was the top-cited risk this cycle. While many respondents viewed tariffs as the key risk, some noted that the domestic economy could weather incremental tariffs on imported goods with only modest disruption," the report observed, adding: "Respondents considered that the potential for an escalatory trade war could have more severe consequences." Survey respondents cited "changes in government spending priorities and the extent of U.S. international engagement" as driving uncertainty.

 

Reuters

Consumers’ outlook on the U.S. economy ended April sharply lower than in March, although a key sentiment measure improved slightly from a preliminary reading earlier in the month. The University of Michigan said Friday its final index of consumer sentiment for April was 52.2, down from 57 in March, but an improvement on a preliminary reading of 50.8 earlier this month. Consumers anticipated inflation will rise at an annual rate of 4.4% over the next five to 10 years, the data out Friday showed. They expect prices to rise at a 6.5% pace over the next year. While down from a preliminary reading of 6.7%, year-ahead price expectations are still the highest since 1981. “Labor market expectations remained bleak,” Joanne Hsu, director of the survey, said in a statement. “Even more concerning for the path of the economy, consumers anticipated weaker income growth for themselves in the year ahead. Without reliably strong incomes, spending is unlikely to remain strong amid the numerous warnings signs perceived by consumers.”

 

Bloomberg

Wall Street Journal

Oregon Attorney General Dan Rayfield has initiated a federal lawsuit aimed at overturning President Donald Trump's recently-announced tariffs, saying that only Congress has the authority to impose such measures. Joined by 11 other states, the lawsuit highlights what is said to be the detrimental impact of these tariffs on Oregon's trade-dependent economy, particularly the footwear and apparel sectors that rely heavily on imports from Asia. The tariffs, which include 145% on Chinese imports and a 46% tax on goods from Vietnam, are forecast to severely burden small businesses. Rayfield's office contends that the president's unilateral power to impose tariffs disrupts the constitutional order, observing: “By claiming the authority to impose immense and ever-changing tariffs . . . the President has upended the constitutional order and brought chaos to the American economy.” The lawsuit has been filed in the U.S. Court of International Trade in New York.

 

Accounting Today

CPA Practice Advisor

OregonLive.com

Republican lawmakers have drafted legislation that would see the PCAOB defunded and folded into the SEC. The PCAOB was set up to oversee audit standards following the collapse of Enron in 2001. Some accounting firms have complained about the activist leadership of chair Erica Williams, under whom tough new standards were imposed and record fines extracted in enforcement actions. The Center for Audit Quality, which represents the largest accounting firms, has called for the agency to do a better job of listening, but has refrained from seeking its elimination.

 

Cryptopolitan

Financial Times

North Korean hackers, part of the Lazarus Group, have established fake U.S. companies - Blocknovas and Softglide - to deceive cryptocurrency developers with fraudulent job offers, aiming to infect them with malware. Silent Push, a U.S. cybersecurity firm, identified these fronts, noting their violation of U.S. and U.N. sanctions, while the FBI seized Blocknovas' domain for distributing malware. “This is a rare example of North Korean hackers actually managing to set up legal corporate entities in the U.S. in order to create corporate fronts used to attack unsuspecting job applicants,” said Kasey Best of Silent Push.

 

Reuters

Microsoft is giving low performers the option to accept a payout and leave the company rather than be placed on a performance improvement plan (PIP), according to Business Insider, which has obtained an internal email outlining the company’s new performance management system. Microsoft's chief people officer Amy Coleman described the new system as having “clear expectations and a timeline for improvement.” A separation agreement that would be the equivalent of 16 weeks' pay is reportedly being offered to those who want to forgo performance management.

 

Business Insider

New Intel chief executive Lip-Bu Tan has told employees that they must be on site four days a week beginning September 1. “When we spend time together in person, it fosters more engaging and productive discussion and debate,” Tan wrote on Intel's website. “It drives better and faster decision-making. And it strengthens our connection with colleagues.” The chipmaker adopted a “hybrid-first” approach in 2021, which allowed most staff the flexibility to work from home much of the time, but more recently, the company has sought to have workers on site about three days a week. “Adherence to this policy has been uneven at best,” Tan said. “I strongly believe that our sites need to be vibrant hubs of collaboration that reflect our culture in action.”

 

OregonLive.com

PepsiCo has revised its full-year earnings expectations downwards, attributing the change to rising costs from tariffs and a decline in consumer spending. The company now anticipates its core earnings per share to match last year's figures, a shift from its previous forecast of mid-single-digit growth. Factors include the 25% tariff on imported aluminum, and the 10% levy on soda concentrate from Ireland. The company has noted that "elevated levels of volatility and uncertainty" are expected for the remainder of the year, influenced by geopolitical tensions. In the first quarter to March 22nd, PepsiCo's net revenue fell by 1.8% to $17.92bn, while net income dropped by 10% to $1.83bn, or $1.48 per share adjusted. Analysts surveyed by LSEG expected sales of $17.77bn and adjusted earnings of $1.49 per share. Pepsi’s worldwide volume fell 3% for its convenient foods unit and was flat for its drinks.

 

ABC News

CNBC

New York Times

Wall Street Journal

Shipping and logistics giant UPS has announced its acquisition of Andlauer Healthcare Group in a deal valued at approximately $1.6bn. Michael Andlauer, the chief executive of AHG and holder of 53.2% of its outstanding shares, supports the transaction. Following the completion of the deal, Andlauer is set to lead UPS Canada Healthcare and AHG. This acquisition marks a significant expansion for UPS into the healthcare logistics sector.

 

Reuters

The Globe and Mail

PwC has instructed nearly 300 of its U.S. partners to terminate their relationships with Black River Management, a brokerage firm involved in speculative small-cap investments, following an internal investigation. The decision has raised concerns among senior executives, as many had previously recommended Black River for its access to lucrative investments. The investigation aimed to determine if independence rules were violated, particularly as U.S. regulators have intensified scrutiny on private investments by accounting firm staff. Black River, which has maintained a 25-year relationship with PwC, claimed it was unaware of any independence violations. The ruling has prompted partners to quickly transfer illiquid investments.

 

Sri Lanka Guardian

Financial Times

EY has appointed Martin Fiore as the Americas vice chair for tax, effective July 1st. Mr. Fiore will manage tax strategy and client services, leading a team of over 18,000 across multiple regions, including Canada, the U.S., and the Caribbean. He will also join the U.S. management committee and the Americas operating executive. In his previous positions, Mr. Fiore has been credited with guiding EY U.S. and its clients through geopolitical changes and technological advancements including AI, impacting tax.  

 

Bloomberg Tax

International Accounting Bulletin

Andrew Parkes from Andersen discusses the U.K.'s proposed tax whistleblower program, which aims to incentivize informants with a share of collected taxes. Drawing inspiration from the IRS and Canadian Revenue Agency, HM Revenue & Customs (HMRC) hopes to enhance reporting of tax evasion. However, Parkes notes that the program's success may be limited due to potential risks for informants, such as job loss or legal issues. He states, "A U.K. tax whistleblower payment program is a good idea . . . . but there are serious risks and problems if the program isn't carefully designed." The complexities surrounding the taxation of rewards and the ethical implications of profiting from crime also pose challenges for the initiative.

 

Bloomberg Tax