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Simon Hobbs

This is the EY podcast, Tax and Law in Focus, ideas for leadership from one of the world's most successful C-suite advisors. As we enter year two of COVID-19, I'm your host, Simon Hobbs, in California. Today we meet one of the most powerful women in tax. EY's Kate Barton has a message: 2021 will be the year of reimagining, of recovery plans that engineer rebounds from COVID-19. But, more fundamentally, now is the time to make strategic decisions that respond to changes triggered by the pandemic, which look like they're becoming our new normal.

For tax, that change may be more profound than you think, because Kate believes we're witnessing a major elevation in the role played by tax authorities in our society. Basically, governments woke up to the fact that their own tax authorities are vast treasure troves of big data on their citizens and their businesses. Moreover, they’re probably their best way to connect to them. It's tax authorities that issued stimulus checks, funneled loans to small businesses, and even contact traced for exposure to COVID-19. And when governments pivot from stimulus to tax hikes, it’s tax authorities that will be charged with navigating that particular policy high wire.

But think how far this elevation of tax authorities might go. With enough investment and the digitization of all transactions, could tax authorities become sophisticated enough that they mimic consumer-facing big tech? On this podcast, you'll hear EY's Kate Barton go even further. If tax authorities collect enough data, from every single taxpayer, in real time, can they remove any disagreements on the tax that's due? And if tech removes tax controversy, could you see the birth of the empathetic tax administration?

Please remember, conversations during this podcast should not be relied upon as accounting, tax, legal, investment, nor other professional advice. Listeners must consult their own advisors.

From New York, we're joined now by Kate Barton, EY Global Vice Chair of Tax, leading over 60,000 tax professionals around the world. Kate, it's great to finally meet you. Welcome.

Kate Barton 

Simon. I'm delighted to be here with you. Hello.

Hobbs 

Also joining us from Dallas, a thought leader with almost as many big business consultancies on his resume as there are sections in the US Internal Revenue Code: Dr. Tassu Shervani, Professor at the Cox School of Business at the Southern Methodist University. Dr. Shevani, it's great to have you on board as well. Welcome.

Tassu Shervani 

Simon, it's wonderful to be here with you. And looking forward to this.

Hobbs 

Yes, me too. Before we get into these big concepts that are emerging from COVID-19, Kate, I want to start with what I think is basically your steadfast leadership message: the question of trust. You firmly believe that trust is the core of any mutually beneficial business relationship. Irrespective of COVID-19, how do you counsel tax executives to build that trust, both internally and externally? And, obviously, with those who could be framed as adversaries down the line, when there's a tax disagreement that blows up?

Barton 

Thank you, Simon. Trust is always a difficult thing to build. It takes a long time to build and sometimes can be easily broken, if not treasured and cultivated. Some of the information I've been looking at recently has shown that businesses have actually gone up on the trust barometer during COVID-19, which I think is interesting.

My advice to tax executives, whether they're in EY member firms or at EY client organizations, on building trust, is that first you have to spend time with the person that you're trying to build that trusting relationship with. Time matters. In a non-digital world, I would always say it's great to have a meal, break some bread with the person, and get to know them, because that's so important. Now we're doing that in a digital fashion.

Second, you need to make sure that your ‘say-do’ gap is zero. Whatever you say, you do. Make sure that people understand it, and then you absolutely do what you're going to say. People really build trust in that fashion.

And then, lastly, and maybe most importantly, I've learned over the years, you have to put yourself in the other person's shoes, because you need their perspective. Whenever you're trying to get something done, you need to understand where they are coming from. Why are they doing what they're doing? What motivates them? How are they evaluated? How can you help them? People want to work with people who help them. So that's the empathy side, which I think is super important. Those are some of the things that I've always used through the years. And that's what I recommend to folks I'm coaching.

Hobbs 

Dr. Shervani, I know that you've also done work for EY member firms on building trust; specifically, the role that verification plays with parties of different viewpoints. Just describe that work to us, if you would.

Shervani 

Absolutely, Simon. There’s a real dichotomy of trust and verification. I think it was late President Ronald Reagan who said, “Trust but verify,” when it came to his dealings with the Soviet Union. The more two parties have opposing goals or opposing points of view – which you certainly might expect in a tax setting, meaning taxpayers and the tax authorities, or other taxpayers and their tax advisers and the tax authorities – verification becomes very critical. Once trust is established, of course, the relationship settles into a pattern where you are willing to take the other party at their word. So the process of verification is very important early on in the building of a relationship. What types of data will you be asked to share? What types of reports will you be asked to make?

Once you have passed this stage of verification, and you have built a relationship of trust, you may get a little more leeway in that relationship. But again, keep in mind that it takes a long time to build trust, and just a very, very small incident to lose trust. So, once you have a relationship of trust, you have to do your utmost to maintain that relationship. Otherwise, you will find that you have to go back into a verification cycle all over again. It's a very delicate relationship. And my advice to parties that are in any sort of engagement, where they have differences of opinion and different points of view, is to nurture trust. And, once they have that trust, it’s to treat that trust as sacred, and do everything possible to maintain that level of trust.

Hobbs 

Kate, let me come back to a point that you made earlier about building trust and physically meeting people. Clearly that's not possible in the same way during COVID-19. What is your position on video conferencing to establish trust? Luis Coronado, EY Global Leader of Tax Controversy based in Singapore, argues that it's actually helped, that there's almost what he calls a “purity of focus” in virtual meetings with tax authorities; fewer distractions, enabling people to better focus on what he describes as the “true business elements”. Would you agree with that?

Barton 

Like everything, there are good things and bad things in the virtual world that we're living in. I think we've all been amazed at how much business we can get done through this digital world and through video conferencing. The day of flying somewhere for a quick meeting for an hour is probably over. Is that really necessary? You can do that through the great technologies all of us have at our fingertips right now, which we’ve figured out how to use quite well. So that is really good.

That said, there's still a lot of sidebar conversations and “getting to know you” items that are just harder in the video world. They can still can be done. We have been amazed at bringing on new clients, for example. Typically, we've learned the incumbent has the advantage in a digital world. But despite that, we've been able to pull in new clients and build those relationships through this difficult COVID-19 environment. So I think we'll retain quite a bit of that. But, at the end of the day, I still think there's a lot to be said about the human element, the tactile feel of being in the same room. And how we get that balance right in the future is top of mind, really, for EY organization, for EY clients, and for the tax administrations.

Hobbs 

I do want to point out, though, that you believe that internal video conferencing, particularly when you're capturing senior leaders at home, in the kitchens or whatever, can soothe corporate disconnects. Because employees who don't normally get physical contact can see who people are, and they can see what those people believe in. And there's a sense that we're all in this together. Correct?

Barton 

That’s been one of the pluses that has come out of this virtual world. We've seen people be pretty natural, if you will. I've had pets come in. I've had dogs come visit us during video conferences, unexpectedly. I've had a pet bird fly in, which I thought was interesting, and I've had little people join us. It’s always fun to see our folks’ young children. We've had a lot of laughs. It's been humorous. It makes people be more real. I like that aspect. I like seeing people in their home office. So, that's been really nice.

Hobbs 

That was not one of the things I was guarding against during this podcast – a bird flying in – but I’m on alert now. The big question for many CEOs is where video conferencing fits when we've unlocked. Asked another way, who goes back to offices? And, of course, is business travel going to fully rebound? Tassu, you've been pulling together 20-25 years of research on communication systems. What does it teach us?

Shervani 

I’m going to go out on a limb and say that in time, not immediately, but over the course of the next three-to-four years, business travel will probably fully rebound. I say this because I have the weight of research here on my side. For the last 30 years or so, we've been doing research on transportation and communication technologies, particularly with a view to understanding whether these are complementary technologies or substitute technologies. That is, does more electronic communication beget more transportation, which in turn then begets more electronic communication? Or are they substitutes? If you communicate electronically, is it going to reduce the amount of travel that you're going to engage in?

Almost every study has shown that transportation and communication are not substitutes. They are complementary activities. That is, more of one leads to more of the other. Think about it: there are people that you would have met for the first time virtually during the pandemic and, at some point, after you've got to know them and spent hours and hours with them on Microsoft Teams, Zoom or Webex, or some other technology, at some point you're going to want to meet these people. You're going to travel to meet them.

The preponderance of the research evidence suggests that more of one will lead to more of the other. In fact, I've done talks for various symposiums via electronic communications such as Zoom or Teams, and those people have reached out to me and said: “Next year, we will hopefully have this in person – would you be willing to join us in person?” They're already asking, so there's a hunger to do this.

Finally, I would like to say that in my own personal experience, I find the two are very complementary. I can’t tell you how many hours of high-definition video I have watched of safaris in Africa, and all it did was increase my desire to actually go to Africa on a safari. I could never get enough of lions, leopards, cheetahs or elephants, just even on very good quality high-definition television, and it made me want to go. I think, both from a business travel standpoint, and also from a vacation or leisure travel standpoint, that, in the fullness of time, and I don't mean next year or the year after, but as we get out to 2023 and beyond that, travel will, in fact, rebound fully.

Hobbs 

Tassu, I take my hat off to you for the wholesomeness of your television viewing through this pandemic. If only we had all met that measure. Kate, I saw that, while he was talking there, you were nodding quite furiously. Let's cut to the chase: you lead over 60,000 tax professionals around the world. Does your business travel return? What are you physically planning for this fall and next year?

Barton 

We are in the process, right now, of imagining our physical return to our offices, as well as what a hybrid model looks like. We're optimistic that travel back to the office will happen locally. With international travel, we're optimistic for the fall, but it still remains to be seen. So much of it depends on every country's vaccination programs, and whether or not the borders open up for international travelers. To Tassu's point, we have pent-up demand, and we have a lot of clients, and our people who really want to see our folks travel around. We have big business needs. That said, it's going to be interesting to see when that comes. My sense is that we'll be gradual, but it will hopefully start sometime in the autumn, and then build up from there in an appropriate way. We also want to make sure that we're very carbon-conscious. And we do things with sustainability in mind. But we're first running client service businesses. So we need to do what is best for the clients.

Hobbs 

A reminder that you're listening to the EY podcast, Tax and Law in Focus, with EY's Kate Barton, and Professor Tassu Shervani. Kate, let me come back to your central projection, that this will be the year of reimagining, not just recovery plans that engineer the COVID-19 rebounds. But as to these strategic decisions that respond to longer-term changes that are brought by the pandemic, from your regular discussions with business leaders, is clarity emerging on what changes are most likely to stick with us? Can people see the future now?

Barton 

The future is clearer in many ways and foggier and others. This pandemic has accelerated the adoption of video conferencing, and has probably accelerated that by 10 or 15 years. I'm sure Tassu has the right statistics, but it has completely accelerated. Sometimes I worry about what it's done on the human side. We are spending more time, right now, with our people, talking about mental wellness, the fear of missing out – we call that FOMO.  There are a lot of people feeling isolated, and maybe not as connected. Sometimes that creates aberrant behavior. So how do we make sure that we're touching all of our people in the virtual world, and that we're there for them. And that's true for EY clients, as well as our own EYers.

Hobbs 

I just want to compliment you for bringing up mental health in a corporate context. I think it takes a lot of connection and, if I may say, real guts to put that into conversations like this. So, thank you.

Tassu, let me come back to you on this question as to what changes. What do we think will be our new normal as we move forward? Do you have clarity on what sticks here?

Shervani 

I just want to echo a point that Kate made a little while ago. That the business trip that you took to meet with somebody for 30 or 45 minutes, where you maybe flew a couple of hours, or maybe even longer, to do that, that's probably gone. We're not going to do that again. From a time standpoint, it probably wasn't a very good use of time. From a carbon footprint standpoint, it probably wasn't a very good way to use the limited carbon footprint that's going to be available to all of us. The big change that I see is in terms of flexibility. If you think of that as our watchword, we have more in our arsenal than we've ever had before. Think about a place to work: we can work in the office; it's certainly more acceptable to work from home; or it may be more acceptable to work at another site, where you may have a temporary office that you could go to for an hour or two. I think we will see much more flexibility in terms of the workplace.

We will also see flexibility in terms of travel. There may be certain travel that is absolutely essential, and it has to be done. And it's a trip that you have to make. But I think we will try to combine those trips, and perhaps take longer trips, and not jump on a plane as casually as we did, say, back in 2019. And even if it's worked with our internal teams, we are going to look at the flexibility that we have now, all the weapons that we have in our arsenal, all the tools that we have in our arsenal, and we will try to tailor the particular tool that we have, whether it's a face-to-face meeting or a video conference with the right opportunity to use that tool, and we will do it much more intelligently – rather than just jumping on planes the way we were. Having said that, I think that, overall, as the economy continues to grow, and as business continues to grow, I don't want anyone from the airline industry who's listening to us to walk away with the feeling that they'll see a permanent dent in their business. I think the overall growth of the economy, and the interest that human beings have in traveling and seeing places and meeting each other, will continue to lift the economy, and will continue to lift the travel and transport industry as well.

Hobbs 

Thank you for that, Tassu. Guys, let me change gears here, if I may. Kate, explain this central view that tax authorities are now on the ascent more than at any time in the past four decades. Tax authorities are not only experiencing substantive change, but also driving it, and that seems to be based on the critical observation that governments have woken up to the fact that tax authorities are these big juggernauts of data.

Barton 

Yes, there has been a realization, again accelerated by the COVID-19 pandemic, that tax administrations are actually a data warehouse for the government. We saw, during this pandemic, that governments were using the information and data that tax administrations had on their citizens. And then, of course, in this revenue-starved economy, where almost every country around the world right now is in a deficit, the tax administrations were relying on data to collect taxes and in some instances be even stricter on enforcement. So tax administrations have a wealth of information on the citizens that live in the country in which they serve. The environment really exposed that, and showed what technology and that information can do to make the world work.

Hobbs 

Dr Shervani, do you see tax authorities as being on the ascent?

Shervani 

Absolutely. I agree with Kate 100% on this. If you think about our economy, there are really three pieces of data that we need, in order to understand and manage our economy better. The first is data on businesses in our economy: How many businesses are there? What do they do? What is their size? What is their profitability? Where are they located? If you think of who has that data, it is clearly our tax authorities, right? And that could be tax authorities at a federal level, at the state level or at the local level. The second piece of data that we need is around the people in our economy, in our society. And we need a great deal of information about them, some of which is collected by the census bureau: that is, people in terms of their demographics, their age distribution, their ethnicity, their income, their wealth, where they live, where they are moving to, and so on and so forth. Of course, tax authorities also have a tremendous amount of data on people, particularly as it relates to people's income and their assets and so on.

The third piece of data is around the transactions that happened in our economy, between the people in the economy and the businesses in our economy. This is data that is mostly in the hands of private companies today, but it is data that the government and the tax authorities want to tap into. I think that increasingly they will want to do that, so that we can build these data warehouses where we can bring together all of this data around the businesses, around the people, and around the transactions that occur in any economy. So that our ability to understand what is going on in the economy, and our ability to predict where the economy might go, and our ability to take corrective action when the economy requires us to take corrective action, like we are doing during this pandemic, will go up dramatically. And I do see tax authorities playing a very central role in the economy-wide data warehouses of the future. 

Hobbs

Kate, there are very few organizations that are truly led at a global scale like yours, as far as the tax authorities are concerned. Talk to me about how developing nations are leading a lot of the change now. Countries like Mexico are investing heavily in technology to plug themselves directly into the servers of multinationals, and to collect the data and calculate their tax liabilities in real time, because the movement for change is coming from corners that you might not normally expect

Barton 

So true, Simon. And what we're really seeing is that the emerging markets, or the developing countries, have really led the charge in adopting technology to do different things on the tax side. At the heart of the issue, some of these countries are plagued more with the shadow economy, or an informal economy, as we’ll call it, so they want to make sure they're collecting the taxes that are actually owed. They're trying to go into corporations’ books and records, and really get to the source data, so they can understand truly the payments that are being made, that the right value-add taxes are being charged, and what people are being compensated, and then they can match it to what someone's reporting from a taxable income perspective.

We're seeing these developing countries, or emerging markets, really being the first to digitalize their whole government platform. And it's amazing. Some of the developed countries are years and years behind. I will just say that places like Estonia and Mexico, and many countries in Latin America, are really lightyears ahead of the developed countries.

Hobbs 

Tassu, the scale of this is extraordinary, when you consider the sheer number of tax authorities.

Shervani 

Absolutely, I recall hearing a number somewhere – and Kate will probably have a much better perspective on this – saying that a typical global multinational company would pay tax in somewhere around 5,000 taxing jurisdictions, by the time you include federal taxes, state-level taxes and local taxes in a couple of hundred countries across the world.

There's clearly a wide range of tax authorities out there, and an economy that's increasingly more dynamic and more complex. So, governments are really struggling with how they understand the modern economy, and how they predict where the modern economy is headed, so that they can line up their revenue collection with the future economy and not be tied to an economy that really doesn't exist anymore. Or with a taxing mechanism that's not really relevant anymore.

Hobbs

From your working relationships with tax authorities, how do they feel about the future? We mentioned the prospect that governments, at some point, are going to ask them to raise significantly more revenue to stem the ballooning deficits. But there's a whole host of stuff going on for them – new taxes, potentially on carbon or wealth or data, as public sentiment shifts; this whole question of bringing gig workers to greater tax compliance; and then the acceleration to cashless with notes and the coins being viewed as germy, which is another product of COVID-19. How do you see these tax authorities embracing change?

Barton 

Tax administrations around the world are ready for this change, or they're definitely of the mindset that things will be different in the days ahead. For most tax administrations, their whole role is to administer the laws that are done in that country. Most countries, from a legislative perspective, are going to try to walk that tightrope of how you still stimulate when many economies are really weak. And then when do you toggle over to revenue-raising to get that deficit down?

So the timing of that, most leading economists would say, is something that you have to time perfectly. You get that wrong, you could be in a recession for a long, long time. Tax administrations, although maybe not making the law, have to administer it. So they want to make sure that the country makes good choices.

One of the big things, because of what their role has been during the pandemic, is they want to be empathetic. I think they want to be citizen-centric. They want to do the right thing by the citizens that they're serving. That said, they realise they have a key role to make sure that the revenue comes in, so that social programs of the government can actually get done. I think in the cashless environment that we're in, or even with investments like Bitcoin and the like, they want to make sure that, if there are transactions, they can find those transactions and make sure that the right amount of cash taxes are collected. That's important for the governments to continue to move forward. So there's a sense of a big fiduciary duty by the tax administrations, and how you do that in a citizen-centric and friendly way, yet get the job done too.

Hobbs 

Right. The elephant in the room, Kate, inevitably becomes what this means for corporations. Because tax managers exist with tax authorities, almost in a symbiotic relationship.

Barton 

Yes. I think corporations need to wake up that the governments have a lot of data about them. And it's only getting more and more. The days of settling tax controversy in one country and not having that resolution, or the data that you provided to settle that controversy that will be shared with another government. We have a lot of clients that have had instances where they've closed pretty big-ticket items in one country, only to have them reopened much, much later, because another country shared that resolution data and in a different way. Maybe they misunderstood it, but it doesn't matter, and it gets reopened.

As you can imagine, one thing companies really struggle with is uncertainty. Having a single story that's coordinated, where you're working with tax administrations in a consistent, coherent, well thought through fashion, is really important to corporations. You want to make sure you have the digital information that's necessary, so you can respond and make sure that both sides have the data-driven information that's relevant to the disputes.

Hobbs 

Dr. Shervani, just on that question of corporations liking certainty, I've seen you point out before that all the things that we're discussing, even in this situation, are happening in a constant state of flux. And that change is accelerating. We've got to nail colors to the mast that things are moving fast, right?

Shervani 

Absolutely, Simon. Just think how complex it has become to run a government in the world today. Governments today have to worry about national security. They have to worry about energy security. Now add to that information security, internal or homeland security. Thanks to the pandemic, there's a new focus on health security. And in addition, we have food security, water security, climate security, old-age security, security and recovery from natural disasters. There's a very long list of what citizens expect the government to do for them today. So governments are under incredible pressure to raise revenue to fulfil the responsibilities and the expectations that citizens have on them.

At the same time, our economy is evolving very rapidly. You know, in the last 100 years, we've gone from an agricultural economy, to an industrial economy, to a services economy, and now to an information economy in the developed world. And emerging countries are coming along very rapidly down that cycle, as well. So you've got tremendous pressure, great needs, that your people have, that you're going to try to meet as a government. And then you've got an economy that's changing very rapidly.

What all of this means is that the tax system is going to be incredibly dynamic. There’s going to be an astronomical increase in the variety of taxes that we create, and the ways we try to collect those taxes. You mentioned a couple: carbon tax, and, as much as I hate to say this, a wealth tax is almost a certainty 15 or 20 years down the road. I don't see how governments can deal with a modern economy without dealing with wealth taxes, given the incredible concentration of wealth that we are seeing in pretty much every economy around the world.

Governments are going to want to use every tax opportunity that is available to them. What this means is that, as a corporation, as Kate said, you’d better have your story straight; you’d better have your data; and you should know that anything you share or are required to share with one government could end up in the hands of every other government around the world. We are headed for a future in which the relationship between businesses and tax authorities is going to be a very, very interesting and dynamic one.

Hobbs

Kate, through this morass, you raise this bigger question, of whether tax authorities can ever mimic consumer-facing big tech. Can they be so data-driven that they create a seamless experience? Forgive me, but would governments ever sign off on that type of investment? Could they ever hire enough technology graduates? How do they get there?

Barton

There are a lot of countries that see the light and realise how much is at stake, and truly do want to digitize their platforms and make it easier for everybody, including themselves. We've seen big investments in a lot of the emerging markets, in developing countries. 

Mexico and Estonia have invested in leading-edge platforms, and they've been able to hire young people graduating with terrific degrees in IT, because a lot of folks feel like it's a great way to start your career. Then, when you finish there, you're a hot commodity to go into a company and leverage that experience of using cutting-edge technologies, the use of artificial intelligence and the whole platform build.

What's interesting to me is that younger people really want to find purpose. A lot of them would like to start their career with the government, and to use EY purpose, building a better working world, really resonates. So I think that, again, there's a war for talent. It could be an attractive place. I'm not sure people will stay long. But I do think there will be some talent attracted to government as a place to modernize.

Hobbs

Dr. Shervani, when tax leaders in the private sector feel challenged to find CapEx, they often come to leaders like Kate, to inquire about outsourcing or co sourcing the work that they have. And on other podcasts, we've done a lot of work on EY offering artificial intelligence capabilities with Microsoft Azure and so forth. Can you envision public players, tax authorities ultimately doing the same could Kate have tax authorities as clients in the future? Do you have tax authorities as clients now, Kate?

Barton

We're careful about working with the government. We will definitely help educate governments on the ramifications of tax policy, and we work carefully with them on platform builds. But we don't ever want to be in a situation where we have conflicts with EY corporate clients.

Hobbs

Tassu, as we move forward through time, do you think that will change? Do you think they will come to the private sector in order to get the investment they require?

Shervani

I think not so much the investment, perhaps, but I would say that they would want the technology, the know-how, and the skills that the private sector has. And, as Kate pointed out, there will be more people going back and forth between the public sector and the private sector than ever before.

There’s a very, very strong relationship between the public sector and the private sector across the board, in many economies. If you think of the military, for example, there’s a large number of young people who go into the military,not for an entire career, but for a period of time, and at some point, they leave the military, and they come out into the private sector. And there are all kinds of programs that are put in place in country after country. In some countries, in fact, there is required military service for a couple of years, where every young person has to go into the military for two or three years, and then come back out into the private sector.

We're going to see an awful lot of back-and-forth movement of technology, people and capital, from the public sector to the private sector. Think about it. A lot of private sector technology is actually initially funded by the government. The basic research is funded by the government. And then, of course, the translational research and the commercialization of that technology is done by the private sector. So, I see stronger, deeper, closer relationships between the public sector and the private sector going forward, than even exist today. So I do think that these two sides will meld and blend with each other in all kinds of interesting ways.

Hobbs

Kate, finally, you introduce another fascinating concept – that of the empathetic tax authority, or the citizen-centric tax authority, where if you collect enough real time data on a taxpayer, it becomes self-evident what the liability is, and you can almost eliminate tax controversies and tax conflicts. Talk me through that. Is that real? Is that going to happen?

Barton

I think it is starting, Simon. I do think that, in some cases, the government has such technology, where they're into a company's books and records. They can actually do the assessment right there and no tax return needs to be prepared. They're just taking the rate of tax and applying it to the relevant data. And then the client, or the company, has a very short amount of time to say yes or no. They disagree, and they’re being charged on a monthly basis. So you can imagine that cashflow improvement. Everything is done on a real-time basis.

Now, that's in a few of the developing markets. It's not for every type of tax yet, but you can see the vision, and you know what will happen in the days ahead. I do think that poses a very different experience for taxpayers. They have somebody in their books and records, which is fine if everything is organized. But in many instances, EY clients are a product of huge amounts of acquisitions, and they have multiple ERP systems. So there's sometimes a lot of data that needs to be added. A plus B. This is the real life that we live in. So somebody could get the wrong data, and apply the right rate to the wrong data, which could end up with a really bad conclusion. But, again, companies need to clean that up as well. I'm really intrigued to see how quickly this will all come together. And as both sides digitalize the opportunities, we'll have to get away from some of the menial, smaller issues, and debate more of the more meaningful things, in the days ahead.

Hobbs

Okay, we've come to the end of our time. It’s been great. I've really enjoyed it. Thank you both. Let me ask you one final question: in five or ten years’ time, when we look back at COVID-19, what do you think our conclusions will be, Dr. Shervani?

Shervani

In one word, resilience. I think it's amazing how resilient we are as human beings, and how resilient our economies are. If you look at everything we've withstood in the last 100 years – World War One; World War Two, ending in Nagasaki and Hiroshima; the Cold War; the Great Depression; the global financial crisis of 2008, the flu pandemic of 1918; the COVID-19 pandemic of 2019-2021 – what I'm amazed at is how we come through all of these, and we come through them stronger, regardless of everything that the last 100 or 120 years have thrown at us.

In that same time period, per capita gross domestic product went up eightfold. And, on average, human beings became eight times richer. They could afford eight times more, and they improved their standard of living. That resilience gives me hope. It gives me optimism for the future. So that's my one key takeaway – that we will bounce back.

Hobbs

Kate, in five or ten years’ time, when we look back at COVID-19, what do you think our conclusions will be?

Barton

I think we'll look back to this time and say it was a time of great acceleration of the technology journey and the whole digitalization. So that is number one. Number two, I think we'll come back with a different meaning of flexibility and how we integrate work and our home lives. It'll be different, but I think we've shown that a lot of work can get done in different places than what we had imagined, and in different ways. And then lastly, from that we'll also learn to be more disciplined, even if you are working from home. How do you preserve your mental wellness, rejuvenate and not have work permeate every aspect of your life? You do need to make sure that you re-energize and I think people have learned a lot about how to do that in a very simple way during COVID-19. I think that'll be lasting. In many ways.

Hobbs

This has been absolutely fascinating. Thank you both for sparing the time. Kate Barton, EY Global Vice Chair of Tax, and Dr. Tassu Shervani, Professor at the Cox School of Business, at the Southern Methodist University in Dallas.

Shervani

Thank you, Simon was wonderful. I enjoyed the conversation.

Barton

Simon, that was awesome. Thank you so much for doing this with us.

Hobbs 

For more information, visit ey.com. A quick note from our attorneys: the views of third parties set out in this podcast are not necessarily the views of the global EY organization, nor its member firms. Moreover, they should be seen in the context of the time in which they were made. I'm Simon Hobbs. I hope you'll join me again for the next edition of Tax and Law in Focus, brought to you by EY.

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