The administration of tax and tax environment has been revolutionized to a large extent due to globalisation, continues tax regulation and advanced technology. In the changed tax environment the traditional tax compliance and reporting methods by invoking manual process is time consuming and prone to human errors. Most of the clients approach reputed auditing accounting taxation related professional services firms like Big Four.
In the light of increasing regulatory changes and technological advancements the use of Artificial intelligence (AI) can bring enhanced accuracy and transparency in several areas of taxation process. The advanced and modern technology of AI software has revolutionized tax operations around the world and has been integrated into different aspects of taxation with the potential to transform taxation process and tax administration.
The AI assisted tax operation has been integrated with wide range of industries including finance, media, cinema, health care, energy,oil,gas, chemical, petrochemical, petrolium, transport, telecom, insurance,auto,IT pharma and so on.
Error during taxation and compliance process are declining
Manual process of tax operation is prone to human error and mistakes. The use of AI in tax operations has significantly reduced the human error in taxation process. The error in taxation process makes various far reaching consequences, which may even lead to dispute and litigation. Therefore the use of AI in taxation process can reduce the possibility of tax dispute, potential tax litigation, other legal and financial complications. Moreover AI assisted taxation process is need of the day and of the society.
Routine tasks connected with taxation process or administration can be automated with the help of AI. For instance, giving alerts regarding tax compliance will bring more capability in responding to tax authorities and regulations. The administration can give alerts related to due date of filing of tax returns. By providing tax related information to the public will bring more increased tax transparency. AI is used to ensure proper collection of taxes and to remove dispute related to taxation.
AI in compliance and reporting
For instance compliance and reporting is one of the most important aspect of taxation which requires AI assistance. The complexities of tax laws and tax regulations can be mitigated through the integration of AI in tax process. In monitoring, compliance and noncompliance can be accessed easily with the help of AI software thereby the taxation authorities can prevent potential fraud. The overall tax monitoring has been improved due to AI technologies.
AI automation in taxation process.
Taxing authorities, businesses around the world and even individuals are widely using AI assistance for smarter tax solutions in both direct and indirect taxation process. AI automation technology can be integrated in tax administration related to filing returns, audit, monitoring of tax compliance, fraud detection. Such AI technology can be used for giving timely alerts for enhancing client relationships and transparency in tax operations.Giving timely alerts regarding client specific tax events is a significant advantage of AI software in tax operation.