Global Indirect Tax Management Market Trends, Forecast Report 2025-2037
Indirect Tax Management Market size was valued at USD 6.5 billion in 2024 and is projected to reach USD 26.8 billion by 2037, rising at 11.6% CAGR during the forecast period from, 2025-2037. In 2025, the industry size of indirect tax management is poised to reach USD 6.9 billion.
The supply chain of the indirect tax management market is influenced by the digital trade facilitation measures. A major measure has been the World Trade Organization’s Trade Facilitation Agreement, which has been in practice since 2017, mandating the use of electronic means to expedite the clearance of goods. The mandate has been supportive in the greater adoption of e-invoicing systems.
The targeted policy measures have been vital in the digitalization of the tax systems and real-time transactions. In terms of measurable impact, the VAT compliance pushed by the European Union has reduced the VAT Total Tax Liability, highlighting the critical role of digital tools in the indirect tax management across supply chains. The table below highlights the strides made by the EU in VAT compliance:
|
Year |
VAT Compliance Gap (€ Billion) |
VAT Gap (% of VAT Total Tax Liability) |
|---|---|---|
|
2018 |
€121.0 Billion |
11% |
|
2022 |
€89.0 Billion |
7% |
In terms of the indirect tax management market’s macroeconomic indicators, a rise in CPI and PPI may prompt governments to alter tax rates to stabilize the economy. For instance, the VAT compliance gap’s reduction is attributed to such policy measures in the EU. The rising public sector investments are vital in supporting indirect tax management. The OECD’s Tax Administration 3.0 framework has emphasized the integration of digital tools ranging from AI to blockchain for tax auditing. The VAT Digital Toolkits of the OECD, developed in collaboration with the World Bank to provide tailored support for implementing VAT on digital trade in the developing economies across the world. Such sustained technological investments are poised to ensure the sustained growth of the market.
Indirect Tax Management Sector: Growth Drivers and Challenges
Growth Drivers
- Push by global mandates for cross-border e-invoicing under WTO and OECD frameworks: A sustained shift towards mandatory cross-border e-invoicing and electronic customs documentation has reshaped the workflows of indirect tax. WTO’s member nations have heightened the digitization of export/import tax records, which now require invoice-level verification. Additionally, the Tax Administration 3.0 roadmap of the OECD heightens the demand for fully digital tax ecosystems with machine-to-machine reporting across jurisdictions. The convergence has also ensured heightened enterprise investment in indirect tax platforms that are capable of real-time international tax data integration. For instance, Brazil, Mexico, and India are some of the top emerging markets and have proactively implemented mandatory e-invoicing for all cross-border as well as B2B transactions by 2025. These developments bode well for the expansion of the market.
- Inflation-driven VAT adjustments and the rising global filing complexity: The indirect tax management market has been impacted by inflation in economies worldwide after the pandemic. To manage inflation and the shifts in the PPI and CPI, governments have taken proactive measures in adjusting the thresholds of PPI/CPI. For instance, between 2022 and 2024, more than 70 countries have revised their VAT structures due to fluctuations in CPI and PPI. The table below indicates the changes made in key economies that are impacting the market:
|
Name of the Country |
Metric |
Revisions (2022-2024) |
|
UK |
Rate Increase |
20% to 22% |
|
Thailand |
Threshold Reduction |
THB 1.8M to THB 1.2M |
|
Bahrain |
Structural Overhauls |
10% |
In 2024, the International Monetary Fund (IMF) estimated that more than 40% of indirect tax revenue is derived from automated reporting systems. This trend ensures a significant requirement for centralized indirect tax management solutions that can manage and adapt to rate shifts:
Cybersecurity Imperatives in Indirect Tax Management
The indirect tax management market is vulnerable to cyberattacks due to the rapid digitalization permeating tax systems and third-party platforms. The sector’s susceptibility to cyberattacks can be discerned by high-profile incidents, such as the HMRC phishing breach that affected a large number of taxpayer accounts. To reduce the threat surface area of these risks, major companies are embracing AI-powered threat detection and multi-factor authentication. The table below highlights the major cyberattacks impacting the market and potential remedies.
|
Company/Entity |
Cyber Attack Type |
Impact |
Potential Remedies to Mitigate the Impact |
|
HM Revenue & Customs (UK) |
Phishing |
£46 million fraud; 100,000 taxpayer accounts compromised |
Implement AI-driven threat detection, enhance employee training, and enforce MFA |
|
MOVEit (Progress Software) |
Data Breach |
Over 2,800 organizations affected; 93.8 million individuals' data exposed |
Regular security audits, patch management, and secure data transfer protocols |
|
CDK Global |
Ransomware |
$26 million ransom paid; services offline for over a week; $606 million dealer losses |
Develop comprehensive incident response plans, conduct regular backups, and employee training |
5G Adoption and Its Impact on the Global Market
The rapid deployment of 5G technology around the world has been instrumental in transforming the indirect tax management market by improving the scope of digital platforms. 5G’s support has ensured improved data collection for tax collections and reporting. As the scope of 5G continues the evolve, it is poised to have a greater impact on the indirect tax management sector:
|
Company/Entity |
5G Application Area |
Measurable Outcome |
|
Freeport of Riga |
Maritime Logistics |
Improved data transmission speeds by over 10x; enabled real-time communication with ships up to 100 miles offshore |
|
BMW Group |
Manufacturing Automation |
Enhanced predictive maintenance and optimized production processes, reducing downtime |
|
DHL |
Warehouse Management |
Deployed 5G-powered IoT solutions to enhance inventory management and fulfillment speed |
Challenges
Lack of interoperability in national e-invoicing systems: A major impediment plaguing vendors in the indirect tax management sector is the lack of interoperability among national e-invoicing systems. The absence of interoperability has hampered cross-border VAT compliance and increased administrative burdens. The fragmentation has highlighted a greater requirement for international collaboration, and the positive regulatory shifts highlight that the challenge will be successfully negated by the end of 2037.
Indirect Tax Management Market: Key Insights
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
11.6% |
|
Base Year Market Size (2024) |
USD 6.5 billion |
|
Forecast Year Market Size (2037) |
USD 26.8 billion |
|
Regional Scope |
|
Indirect Tax Management Segmentation
Type (Cloud-Based, On-Premise)
The cloud-based deployment of indirect tax management market is slated to hold a leading revenue share of 70.7% during the anticipated timeline. The growth of the segment is supported by a surging demand for cost-effective solutions that are scalable. The segment’s profitability is tied to the increasing digitalization of tax management platforms. Additionally, cloud-based tax management solutions expand the scope of deployment to SMEs. The shift towards cloud solutions has been heightened by the growing demand from businesses to adapt to dynamic tax laws and digital transformation initiatives globally.
Industry Vertical (BFSI, Retail, Manufacturing, Healthcare, Government)
The BFSI segment of indirect tax management market is poised to account for an industry-leading share of 28.8% during the forecast timeline. The sector’s expansion is supported by the high volume of financial transactions and the rising requirement for compliance with indirect tax laws such as VAT and GST. Major financial institutions have been investing heavily in tax management solutions. For instance, JPMorgan Chase increased its annual technology spending to USD 17 billion in 2024.
Our in-depth analysis of the global indirect tax management market includes the following segments:
|
Type |
|
|
Industry Vertical |
|
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Customize this ReportIndirect Tax Management Industry - Regional Scope
Asia Pacific Market Forecast
The APAC indirect tax management market is positioned to account for a leading revenue share of 37.9% by the end of 2037. The regional market’s expansion is supported by the digital tax reforms and the harmonization of indirect tax regimes. The proliferation of e-invoicing mandates has reduced tax leakage in the region. The rollout of mandatory e-invoicing for entities exceeding ₹50 crore turnover highlights the favorable regulatory ecosystem in the emerging economies. Tax management vendors are poised to find greater opportunities in markets of China, Japan, India, and South Korea throughout the forecast timeline.
The India indirect tax management market is predicted to exhibit robust growth and emerge as one of the most lucrative domestic markets globally. The nationwide implementation of GST has benefited the market's growth. The digital tax infrastructure has expanded in India, with trends such as the heightened use of e-way bills permeating the market. By the end of 2024, the GST network in India facilitated data exchange for more than 12 million taxpayers. The structural reforms in the tax system in India are poised to ensure a sustained demand for tax management platforms.
North America Market Forecast
The North America indirect tax management market is expanding at a CAGR of 13.8% during the forecast period, exhibiting the fastest expansion. Key drivers of the regional market are the rising complexity in cross-border taxation and the ongoing push for regulatory modernization. In terms of major changes, the 2018 South Dakota v. Wayfair Supreme Court ruling has fundamentally altered sales tax collection, pushing businesses to comply with remote sales tax obligations across multiple states in the U.S. Additionally, the digital tax reforms of Canada include expanded electronic filing requirements. A convergence of these factors has ensured the sustained growth of the North America market.
The U.S. indirect tax management market is estimated to maintain a prominent revenue share in North America. Key aspects of the U.S. market include audit modernization along with the digital transformation of the BFSI sector. The IRS has been proactive in pushing for improved digital reporting, intensifying the demand for comprehensive tax technology solutions. In 2023, the IRS reported a 14.8% increase in digital filing among large enterprises, supported by heightened scrutiny and the requirement for accuracy in multi-state tax reporting. The dynamic regulatory environment has ensured sustained growth of the sector.
Major Market Players in the Indirect Tax Management Landscape
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The global indirect tax management market is poised to maintain robust growth during the forecast timeline. The market is dominated by the U.S.-based technology providers due to their advanced tax compliance platforms. Greater opportunities are set to arise from the integration of AI in tax management platforms as the calls for improved accounting intensify. The table below highlights the major players of the indirect tax management market:
|
Company Name |
Country |
Revenue Share (2024) |
|---|---|---|
|
Thomson Reuters |
USA |
14.8% |
|
SAP SE |
Germany |
11.6% |
|
Vertex, Inc. |
USA |
10.9% |
|
Avalara, Inc. |
USA |
8.4% |
|
Sovos Compliance, LLC |
USA |
7.7% |
|
Wolters Kluwer |
Netherlands |
xx% |
|
Taxamo |
Ireland |
xx% |
|
Taulia |
USA |
xx% |
|
Ceridian |
USA |
xx% |
|
Thomson Reuters Australia |
Australia |
xx% |
|
DOUZONE Bizon |
South Korea |
xx% |
|
Genpact |
India |
xx% |
|
Intellect Design Arena |
India |
xx% |
|
Fusionex International |
Malaysia |
xx% |
|
Fujitsu Limited |
Japan |
xx% |
|
NEC Corporation |
Japan |
xx% |
|
NTT Data Corporation |
Japan |
xx% |
|
Ricoh Company, Ltd. |
Japan |
xx% |
|
Hitachi, Ltd. |
Japan |
xx% |
|
Mitsubishi Electric Corporation |
Japan |
xx% |
Below are the areas covered for each company in the indirect tax management market:
In the News
- In March 2024, Vertex introduced the cloud-based indirect tax solution for MNCs. The early adoption data highlights a 12% increase in revenue in the first quarter of 2024. The platform supports the expansion of real-time VAT reporting.
- In January 2024, Sovos launched its intelligent tax network by integrating AI-powered analytics along with cross-border transaction monitoring. The solution has supported a 16% increase in user adoption by mid-2024, attributed to the integration with ERP systems.
Author Credits: Abhishek Verma
- Report ID: 3524
- Published Date: Jun 09, 2025
- Report Format: PDF, PPT
