Tax Software Market size is estimated to cross USD 42.58 Billion by the end of 2031, growing at a CAGR of 10.9% during the forecast period, i.e., 2022-2031. In the year 2021, the industry size of tax software was USD 15.27 Billion. The growth of the market can be attributed to huge loss of revenue owing to tax invasion. In United States every year lose about USD 180 Billion in tax evasion. Further China and Japan lose approximately USD 60 Billion and close to 50 Billion respectively owing to the same reason. Hence installation of tax software is expected to reduce the tax fraud taking placing all around globe which is further boosting the demand for the same. Additionally, the governments have recognized the benefits of digitization and began implementing information technology and e-services to increase productivity and enhance government functions including tax collection and auditing. They are extensively employing tax software or integrated websites in order to offer dependable and quick operations, further assisting both clients and accountants in quickly accessing accounting information.
In addition, demand for cloud-based tax software is rising across all end user industries. The use of cloud accounting has changed how frequently accountants operate and interact with their clients. These cloud-based solutions support businesses in decentralizing data storage and computation and provide high levels of flexibility, scalability, cost savings, and data security. Further, there has been surge in small and medium scale businesses which is also estimated to boost the growth of the market. For instance, India has about 62 million micro businesses, 0.33 million small businesses, and roughly about 4000 medium-sized businesses. These small and medium-sized companies are also adoption cloud-based tax management solution extensively. This is since they benefit from the incorporation of cloud-based tax management solutions into their organisational frameworks, as it facilitates them in lessening the economic burden related to subscription, software programme license acquisition, and maintenance.
Growth Drivers
Challenges
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Base Year |
2021 |
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Forecast Year |
2022-2031 |
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CAGR |
10.9% |
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Base Year Market Size (2021) |
USD 15.27 Billion |
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Forecast Year Market Size (2031) |
USD 42.58 Billion |
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Regional Scope |
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Deployment (Cloud, On-Premises)
The global tax software market is segmented and analyzed for demand and supply by deployment into cloud, and on-premises. Out of these segments, the cloud segment is anticipated to grow with the highest CAGR of 11.3% over the forecast period. This growth of the segment is attributed to the large number of finance professional working from home. For instance, since the UK Coronavirus lockdown began in March, the vast majority (about 96%) of accountants and other finance professionals have worked from home. Hence tax software makes it easy for employees to work from anywhere as so long as they are connected to the internet. Additionally, authorized users of cloud-based tax software have the freedom to access the system from any location around the clock using a web browser, so they are not restricted to the confines of their office space. Moreover, growing efforts of various organization in order to offer their best services to general public is also estimated to boost the market growth. For instance, the leading Indian income tax e-filing service EZTax.in has added new capabilities that automatically select the appropriate tax regime to help customers save every last cent of the IT return.
End-user (Individuals, Commercial Enterprises)
The global tax software market is also segmented and analyzed for demand and supply by end user into individuals, and commercial enterprises. Amongst these segments, the commercial enterprises segment is anticipated to grow at a highest CAGR of 11.0% over the forecast period, backed by growing use of tax management software by commercial enterprises in order to integrates numerous applications including sales and billing software, purchasing software, accounting and employee payroll system, and other financial applications. This software is deployable across corporate networks on a variety of platforms and could be tailored for certain business needs. Additionally, the technicality of sales and use tax has increased significantly. To detect tax fraud and tighten up compliance, tax jurisdictions all over the world are aggressively utilizing technology. As a result, it has become necessary for small business to extensively deploy sales tax software to make their business grow. Further, as businesses expand, companies require business-oriented tax management that is created in accordance with particular business requirements that encodes corporate policies, regulations, and processes. Hence, the demand for tax software is estimated to increase.
Our in-depth analysis of the global tax software market includes the following segments:
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By Deployment |
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By Tax Type |
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By End User |
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By Component |
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By Industry Vertical |
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North American Market Forecast
The North America tax software market is projected to hold the largest market revenue of USD 14,201.7 million by the end of 2031, up from a revenue of USD 5,268.9 million in the year 2021. The growth of the market in this region can be attributed growing penetration of smartphones, and surge in number of internet user. There were about 414 million internet users in North America. In 2026, this number is anticipated to reach approximately 445 million internet users. Owing to rise in the internet user the demand for tax software is expected to grow as using internet provide them to avail benefit of advanced technology. However, the market in Asia Pacific region is estimated to grow with a highest CAGR of 11.9% over the forecast period.
Sovos Compliance, a leader in global tax software and industry authority, has just published a reference for insurers on Insurance Premium Tax (IPT). Both inexperienced IPT practitioners and seasoned tax professionals worried about cross-border compliance could find reliable advice in the booklet. Those who want to understand more about the evolving IPT regulatory environment around the world, notably in Europe and EU Member States, would find this insight to be of particular interest.
Intuit Inc. ProConnect has announced intentions to provide new third-party integrations to ProConnect Tax Online, Lacerte, and ProSeries in order to enhance their functionality. The growing partnership ecosystem would provide tax professionals access to additional resources to better serve clients, automate compliance tasks, and maintain using the software they already know and love while also improving workflow.
Author Credits: Abhishek Verma, Hetal Singh
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