Artificial Intelligence (AI) has been around for quite some time now, and Tax technology is the new normal enabling business process, improving efficiencies into critical data integration and acting as a safety net during a business interruption. Increasing the scope of data integration ensures that it can be used for diagnostic reviews and to provide definitive tax solutions for businesses.
Technology has pervaded its way into volume submissions of the tax filings, which include employer tax declarations, Vat submissions, bottlenecked deadlines, provisional tax filing all due simultaneously where AI can ensure accurate data transfer and extrapolation for specific disclosures, with the minimal manual intervention involved.
Artificial Intelligence for Tax filing
The tools built around AI are the most suited to processes which:
• Use structured electronic data and are well-documented with low error rates
• Are repetitive and transactional in nature
• Involve high volume and time
• Have decision-making processes that can be coded with rules
Leveraging the Benefits of AI into Tax Filing
Now that we know where can artificial intelligence be used into Tax Filing, the next question that comes is how can the tools of Artificial Intelligence like machine learning and robotic processing automation be applied to simplify your tax process?
1. Deploy RPA to Automate Repetitive Tasks
Many tax professionals perform the same tasks day in and day out that include processing documents, reporting and adhering to compliances. They constantly click on the same buttons to generate reports or follow the same series of actions for audit or document processing. Technology is all set to change that, thanks to RPA manual, repetitive tasks like these can be automated.
2. Use Machine Learning to Extract Key Data from Tax Documents
Tax documents come with 3 important tasks that include classification, taxonomy, and data extraction. Before anything else in the tax cycle can be worked on, the team needs to identify the nature and source of the documents that come in and who they came from, define what useful information is on the document, for purposeful and intelligent data extraction.
Artificial Intelligence for the Global Citizen
Globally mobile employees require specific tax reporting as they move from different geographies in a year. The immense travel could be a hassle to organisations as they have to incorporate different tax rules and Jurisdiction of the different geographies.
Information gathering is a time-consuming process for professionals who are tax residents of one country and non-resident of the other where they are physically rendering a service.
Data from a single data entry perspective can help business in mitigating tax risks and enables tax compliance at locations in which they are working, thereby reducing the reputational risk for new start-up businesses at foreign locations.
The Indispensability of AI
Automating the tax return life cycle, taking into account the dispute resolution processes, can significantly enhance the service offering for most tax practitioners. Automation will work as an important enabler within the tax function but it cannot replace the technical and advisory aspects of tax in its entirety.
Simplifying Tax Automation
• Automating datasets and data mining
Data analytics is pivotal to the data extracted for accurate advice and tax liability estimations. Analyzing datasets can be used for the different tax disciplines like transactional tax reviews, such as VAT and employees’ tax.
• Automation for Tax Technical
For a tax practitioner, infinite permutations and ‘what if’ scenarios exist and this can present significant challenges and should be cautioned. To achieve a tax technical outcome, automating an arrangement of principles can be achieved by process automation used to provide advice, recommendations and definitive results. In case of exceptions, manual intervention based on tax technical is applied based situations and instances.
Amalgamating AI and Tax
Recent legislative changes have made reporting a key requirement for multi-jurisdictional entities. The reporting may differ from geography to geography and country to country. AI can enable compliance requirement to ensure the integrity of the data that gets extracted is not compromised. Automation into tax is a welcome change and is sure to take away the mundane, regular and time-taking tasks to a bot promising great strides into speed and accuracy.
Having a trusted AI solution with a reliable method for reporting and disclosure can make the world of tax a little more certain!