As we described in our recent articles ‘Tax Administrations (TA) Raise The Playing Field With Technological Solutions’ and ‘Experience of SAF-T in Europe (Starting Point Of Digitalization)', tax authorities around the world are facing many challenges brought along with international requirements for full transparency, substance and consistency of data worldwide. Leveraging AI as a tool to enhance efficiency, useful outliers and data analytics for the tax administrations has also been a trend among countries.
The impact of AI in the day-to-day workflows of corporations and tax administrations can bring impressive results, changing the mindset of simple tax compliance to data analytics machine-learning tools. Those tools can read a massive quantity of data or documents and instantly assess any errors in journal ledgers or tax systems, with improved accuracy and certainty.
As an example, the Australian Taxation Office (ATO) partnered with Accenture way back 2002 to create and implement integrated information technology platform, consolidating the ATO’s core functions into two systems - namely Integrated Core Processing (ICP) and Siebel. ICP is used for client registration, processing and accounting while Siebel is used for case management, collections and customer relationship management. Apart from updating internal systems, the ATO has integrated Nuance’s intelligent virtual Assistant, Nina, within the organization’s website in 2016. This allows ATO’s customers to have their questions answered by AI, called Alex. Having Alex handling the ‘easier’ questions allows agents to focus on more complex cases.
Having addressed Brazil’s developments in ‘Tax Administrations (TA) Raise The Playing Field With Technological Solutions’, we can move a little north, landing in Mexico. In 2001, the Mexican Tax Administration Service (SAT) defined the electronic billing scheme Comprobantes Fiscal Digital por Internet (CFDI) to modernize its technology infrastructure and to better meet the needs of the public. CFDI has been mandated for companies doing business in Mexico. In 2015, SAT made an update to its systems and integrated cloud computing services from Microsoft Azure, a web-based software providing on-demand compute, storage, content delivery and networking capabilities. It is also capable of supporting high traffic volumes in real time.
The software tools are not only concerning the relationship between tax authorities and corporates. Taking Canada as example out of many, the Canada Revenue Agency (CRA) uses NETFILE which is an internet-based filing service that allows eligible Canadians to submit personal income tax return to the CRA. This type of online filing is common, whereas some tax authorities have already filled in your tax return based on their information, be it partially. All you need to do is cross-check the already filled in data with your documents and adjust where needed.
Invariably, machine-learning tools, rule-based and search systems can speed up tax processes. Next to that, it can benefit companies and tax authorities with data analytics and accuracy over tax and accounting compliance. The tax authorities are already undergoing changes with the greater application of AI, and it is expected to increase even more over the coming years. So, be aware that changes are already happening.