Tax and AI - a look inside the Fourth Industrial Revolution
December 11, 2019
We’re familiar with the idea of the Fourth Industrial Revolution (4IR); it’s all about technological advancement and replacing humans in the workforce isn’t it? Well, not really.
The 4IR is far more complex, exciting and enabling than that. Like the three industrial revolutions before it, wholescale global change brings risks, but it also brings many opportunities which we can’t even begin to imagine right now. As we step into this “new chapter of human development” where the physical, technological and human worlds are joining, individuals and organisations should embrace this new era. And this is especially relevant for finance and tax in business.
We’re seeing a very clear trajectory in tax driven by demands for greater transparency, fairness, accountability and compliance. In parallel, tax authorities around the world are getting more sophisticated in their use of technology to mine data, compare information and challenge business. Now more than ever, tax functions need to harness new technologies, new skills and new ways of working to not only keep up with these changes, but to make insightful data-driven decisions and stay relevant.
So how can tax benefit from embracing this new era?
Blockchain is already being used to counteract fraud and “small” automation (as opposed to large scale finance system transformations) enables the efficient, accurate extraction, manipulation and visualisation of data. However, AI and machine learning can do so much more. AI can sense, think and act. Amazing isn’t it? AI capabilities include natural language processing, machine learning, robotic process automation (RPA) and deep question and answering. Applied to the tax function, AI is being used to process tax notices, for account classification, carry out tax compliance and reporting activities and even answer tax questions using a tax chatbot. If you’re wondering where this might be happening, it’s happening right here, at PwC and you can find examples in the full article below.
Of course, using AI safely in business requires careful planning, development and implementation and is best approached using a responsible AI framework. The tax function needs to be a key player in any move to AI adoption in business, to ensure they get maximum benefit from the emerging technology in the 4IR.
To find out more, take a look at our latest article from our Tax Function of the Future series.