The report, 2025: People, economy and the future of tax, suggests a future world in which service industry professionals such as accountants will be replaced by robots and the size of revenue authorities such as the Australian Taxation Office will shrink.

"The technological changes ... are likely to mean few mid-skilled jobs will be required," the report says.

Tax in 2025 could  involve the application of artificial intelligence to the preparation of tax returns.

"This is beyond complex automation, which would involve picking up items in the general ledger and mechanistically using that data in the tax return," it says.

Robotics now account for more than 80 per cent of work involved in manufacturing a car.

"The future will see this extend to the service industry," the report says.

"While we have seen ATMs become ubiquitous in the banking sector, the same could exist for dispatches from a chemist or even a fast food outlet."

More rational decisions

Artificial Intelligence and cloud robotics will also help "provide a new level of rational decision-making".

"We are at the beginning of this revolution now," the report says.

"Cloud robotics allows computers to draw on massive databases in the cloud for the learning experience. Deep learning is a form of artificial intelligence that uses complex algorithms to try to mimic the human brain through the recognition of patterns in images, sounds and other data."

Efficiencies gained from the use of artificial intelligence and automation will lead to greater outsourcing.

But rather than see this as a threat, KPMG suggests that "this will free-up personnel for greater value-added activities and also provide deeper comfort in an environment of higher scrutiny".

It says revenue authorities will become more precise in their targeting and enforcement.

They will be able to run "various mechanistic and cognitive intelligence-based analyses to test systems controls and precisely target tax risk".

"This will arise from a relatively deep and long-term understanding of business taxation combined with new technology tools," it says.

Data analysts, IT specialists in demand

At the same time skills in data analytics and technology, already in high demand, will become even more desirable.

"One can expect many medium-size tax functions to have a dedicated IT specialist," the report says.

"As transfer pricing becomes more complex, the future tax function may well require skills in economic analysis. It will also require negotiation skills and proficiency in managing disputes in a wider variety of jurisdictions and cultures."

It suggests that many of these disputes will be so complex and involve multiple jurisdictions, that a major skill-set of the future will involve "sorting through the noise and complexity to a clear solution".

In fact, tax will move further and further away from being a straight audit function to a consulting function where "broad commercial insights" are required.