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AI - in - Taxation - Final - Repaired

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6 views14 pages

AI - in - Taxation - Final - Repaired

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professionalendeavour
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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U T I L I Z I N G A RT I F I C I A L

INTELLIGENCE IN THE
PA K I S TA N I TA X AT I O N
SYSTEM:

PROSPECTS AND
CHALLENGES

(26th PPG at MPDD, Lahore)

Zaigham Nawaz Ch.


S&GAD.
INTRODUCTION

Current Issues in Pakistan's Taxation System:


• Ineffi ciencies: Lengthy processing times,
manual errors.
• Tax Evasion: High levels of unreported
income, estimated at 50% of GDP.
• Bureaucratic Complexity: Cumbersome
procedures and outdated systems.

Opportunities: AI can help


• modernize tax administration,
• enhance effi ciency,
• Improve compliance
A I & I T S
A P P L I C AT I O N S I N TA X AT I O N
K E Y C O N C E P T S

• Artificial Intelligence is a branch of computer science


capable of performing tasks that typically require
human intelligence.
• These tasks range from experiential/machine
learning, understanding natural language,
recognizing patterns, solving problems, and making
decisions.

Applications in Taxation:
• Automation: Streamlining routine tasks.
• Data Analytics: Enhancing decision-making.
• Fraud Detection: Identifying discrepancies.
• Customer Service: Improving taxpayer interaction.
PROSPECTS OF
A RT I F I C I A L I N T E L L I G E N C E I N T H E
PA K I S TA N I TA X AT I O N S Y S T E M
A U T O M AT I O N O F R O U T I N E
PROCESSES
​
Tasks AI Can Automate:

• Filing Tax Returns: Automatic data entry and


validation.
• Processing Refunds: Faster processing times.
• Verifying Documents: Automated checks for
completeness and accuracy.

Benefits:
• Time Reduction: Up to 50% faster processing.
• Error Reduction: Minimizing manual entry errors
E N H A N C E D D A T A A N A LY T I C S
F O R TA X C O M P L I A N C E
AI Capabilities:
• Data Analysis: Handling large datasets,
detecting anomalies.
• Pattern Recognition: Identifying trends
indicative of tax evasion.
Benefits:
• Fraud Detection: Increased efficiency, with AI
potentially identifying up to 90% more
fraudulent cases compared to traditional
methods.
• Revenue Forecasting: Improved accuracy in
predicting future tax revenues
• Policy Impact Simulations: Accurate
forecasts of impact assessment of tax policy
changes across economy wide spectrum
I M P R O V E D TA X PAY E R
S E RV I C E S

AI Tools:
• Chat bots: Providing instant responses to
common queries.
• Virtual Assistants: Guiding taxpayers through
complex processes.

Benefits:
• Reduced Workload: 30% reduction in calls and
queries to tax offices.
• Enhanced Satisfaction: Increased taxpayer
satisfaction by 20%
P R E D I C T I V E A N A LY S I S F O R
POLICY MAKING
• AI Applications:
• Simulations: Predicting outcomes of various
tax policies. Impact Analysis: Evaluating the
effects on economic growth and revenue.
Benefits:
• Informed Decisions: Data-driven policy
adjustments. Revenue Optimization: Better
alignment of tax policies with economic goals
R E D U C T I O N I N TA X E VA S I O N
AND FRAUD

3 AI Techniques used globally to curb evasion & fraud


in taxation:
• Cross-Referencing: Integrating data from financial
institutions, property records, and business
transactions.

• Discrepancy Detection: AI can identify


discrepancies that might be missed by traditional
audits.

• Fraud Prevention: Early detection of potential


fraudulent activities
C H A L L E N G E S O F A I I M P L E M E N TAT I O N I N
T H E PA K I S TA N I TA X AT I O N S Y S T E M
D ATA P R I VA C Y A N D
SECURITY CHALLENGES

Concerns:
• Sensitive Data: Protection of personal and
financial information.
• Data Breaches: Risk of unauthorized access
and misuse.

Solutions:
• Regulations: Implementing stringent data
protection laws.
• Encryption: Using advanced encryption
methods & blockchain technologies to
safeguard data through digital footprint
INFRASTRUCTURE AND
T E C H N I C A L E X P E RT I S E
CHALLENGES
Modern Infrastructure: Upgrading IT systems to support
AI technologies.

Skilled Workforce: Training personnel in AI tools and


methodologies.

System Upgrades: High costs and logistical complexities.

Skill Gaps: Lack of qualified experts in AI and data


analytics especially in Public Sector

Internet Connectivity:

Digital Divide:
H I G H I M P L E M E N TAT I O N
COSTS

Considerations:
• Initial Investment: Significant capital
required for AI technologies.
• Ongoing Costs: Maintenance, updates, and
scaling expenses.

Implications:
• Budget Constraints: Particularly challenging
for developing countries like Pakistan
R E S I S TA N C E T O C H A N G E
Concerns:
• Job Losses: Fear of automation replacing human
jobs.
• Adaptation Issues: Difficulty in transitioning to
new systems.
• Loss of Arbitrary power: The status qou always
jealously protects adherence to arbitrariness &
discretionary power.

Solutions:
• Gradual Implementation: Phased introduction
of AI technologies.
• Change Management: Providing support and
training to ease the transition

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