CFOs Increase Tech Spending: What It Means For Tax Automation and ROI

Good news for indirect tax leaders seeking to improve their tax technology stacks: CFOs are listening. Finance leaders also appear more willing to green-light digital transformation and technology investments than at any point in the past couple of decades.

Grant Thornton has surveyed finance chiefs on their budgeting and tech and consulting services investment expectations each quarter for the past 21 years. The firm’s Q1 2026 CFO survey reveals that 68% of the 200-plus CFO respondents expect IT/digital transformation costs to increase during the next 12 months. This figure exceeds the previous record high (67%) established in Q4 2025.

From Cost Reduction to Growth Driver

The receptive tech-funding environment is largely tied to the board and C-suite’s push for AI adoption throughout the organization. Grant Thornton’s analysis indicates that finance leaders increasingly view AI investments as drivers of revenue and productivity leaps rather than as pure efficiency plays. Notably, workforce layoff expectations remain at a 15-quarter low, reinforcing the view that these investments are intended to expand—not simply streamline—operations.

“To deliver growth, AI-driven productivity often requires investments in people for quality control and product support where the existing headcount does not have the appropriate skillset for the work,” reports Grant Thornton Tax Solutions, Quality & Risk Leader Dana Lance.

Data Quality Concerns

Beyond the emphasis on AI tools and related upskilling needs, the survey findings point to several implications for indirect tax groups:

• ROI (still) reigns: Not only do more than two-thirds of CFOs expect to increase technology spending in the coming year, but 62% of finance chiefs express confidence that these investments will meet expectations. This does not eliminate scrutiny, however. Tax automation business cases require quantifications of compliance risk reduction, accuracy improvements, and, where possible, reductions to tax contingency reserves.
• Data quality demands attention: More than half of surveyed CFOs identify technology and data constraints as the leading challenge to digital transformation in the finance function. This issue also affects finance-adjacent systems that rely on ERP master data. When data governance and master data management are subpar – in ERP systems or tax technology stacks – tax data errors can snowball, escalating audit risks. Indirect tax teams must maintain clean master data across product taxability, jurisdictions, and customer exemption status.
• New technological capabilities contribute to compliance complexity: Nearly two thirds of finance leaders report that their organizations have introduced dynamic or segmented pricing models (or at least have these capabilities in pilot mode). Pricing models that vary by customer segment, geography, or time raise taxability and sourcing questions. Indirect tax teams should advocate for early involvement in tech-driven pricing initiatives to avoid downstream compliance issues and audit exposure surprises after dynamic pricing takes effect.

Above all, Grant Thornton’s survey results indicate that indirect tax leaders should emphasize AI-driven growth and productivity gains, tangible ROI, and data governance in proposals for new tax automation investments. The results also suggest that these business cases are likely to succeed.