The emergence of generative AI has sparked interest in using AI to boost productivity, enhance customer service, improve efficiency, and modernize IT on a larger scale.
A recent IBM® commissioned research revealed that 42% of enterprise-scale businesses have already implemented AI, while another 40% are actively exploring AI technology. However, adoption rates in the public sector have been slower due to perceived risks.
Nevertheless, the latest CEO Study by the IBM Institute for Business Value showed that 72% of government leaders believe that the potential productivity gains from AI and automation outweigh the risks and are necessary to stay competitive.
Driving innovation for tax agencies with trust in mind
Tax agencies are a part of the public sector that could benefit from responsible AI tools. Implementing generative AI in tax administration can lead to a more personalized and ethical future, but it requires proper oversight and governance to build public trust and mitigate risks.
Government agencies face unique challenges but share the goal of enhancing efficiency and transparency to meet taxpayer demands.
To manage risks associated with AI deployment, governments can rely on IBM’s five fundamental properties for trustworthy AI: explainability, fairness, transparency, robustness, and privacy. They can also develop AI strategies that prioritize human involvement in decision-making.
Exploring the views of global tax agency leaders
The IBM Center for The Business of Government, in collaboration with the American University Kogod School of Business Tax Policy Center, organized roundtables with global tax agency leaders to discuss AI and taxes. Insights from experts highlighted the potential benefits of AI in tax agencies, such as enhancing customer service and detecting tax scams.
Global tax leaders emphasized the importance of effective governance and risk management in adopting AI technologies.
Responsible AI services improve taxpayer experiences
According to the FTA’s Tax Administration 2023 report, a significant number of taxpayers and businesses now file taxes digitally, with many tax agencies using virtual assistants to improve efficiency. Virtual assistants like watsonx™’s advanced AI chatbots can provide 24/7 support, reduce errors, and enhance taxpayer experiences.
However, agencies must address concerns around data privacy, reliability, and biases in AI applications to ensure transparency and compliance with tax regulations.
What’s next?
Global tax leaders should prioritize AI governance frameworks to manage risks and support compliance programs. IBM’s technology, including watsonx™ and watsonx.governance™, can help tax agencies deploy AI responsibly and effectively.
Learn more about how watsonx can help governments transition into the future.
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