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The Review of the Tax System Will Be More Efficient Thanks to New Technologies
The integration of Artificial Intelligence (AI) into the Italian tax system represents a significant step towards a more efficient and modern review of national financial policies. The recent enabling law for the revision of the tax system (Law 9 August 2023, n. 111) laid the foundations for the use of AI in order to optimize tax control and fight tax evasion. Although details on practical implementation still remain to be defined, AI promises to revolutionize tax assessment, improving efficiency, transparency and protection of personal data.
This project represents a significant step in the evolution of the Italian tax system, which has already seen initial efforts towards digitalisation and simplification, as demonstrated by the VeRa application used by the Revenue Agency for the analysis of evasion risk. However, the true innovative power of the enabling law lies in its recognition of AI as an integral part of tax system reform. Currently, the implementing decrees do not provide specific indications on the use of AI in tax control and collection. However, the recent Triennial Agreement between the Ministry of Economy and the Revenue Agency underlines the Agency’s commitment to applying technologies such as AI to strengthen tax controls and improve the effectiveness of collection.
It is important to underline that the foundations for the use of AI by the Revenue Agency have already been laid in the past, with the 2020 Budget Law which allowed the use of advanced technologies for the analysis of tax risk. The implementation of tools like VeRa has demonstrated the effectiveness of such approaches in identifying potential evaders and incentivizing spontaneous compliance. The financial resources necessary to create the “tax system 4.0” appear to be already available thanks to the investments envisaged in the National Recovery and Resilience Plan. Furthermore, the recent Revenue Agency Directive indicates a clear commitment to using AI to improve risk analysis and combat tax fraud.
To fully understand the potential of AI in the Italian tax system, it is useful to break down the different phases of tax assessment and identify the areas in which advanced technological systems can intervene. From data collection to collection, AI can play a key role in improving the efficiency and accuracy of tax operations. For example, machine learning algorithms can analyse large amounts of data to identify suspicious activity and predict future taxpayer behaviour, allowing you to focus resources on cases with the greatest risk of tax evasion. During tax audit, AI can assist inspectors in searching and analysing relevant documents and transactions, reducing human errors in tax calculations. In the collection process, AI can automate manual processes and manage communications with taxpayers, creating personalized payment plans. However, it is essential to ensure a balance between the effectiveness of the technology and the protection of personal data and the sensitivity of tax issues.
While the integration of AI into the Italian tax system represents a significant opportunity to improve the efficiency and transparency of the system, it is essential to address data privacy challenges and ensure that AI is used ethically and responsibly . Only through a balanced and aware approach can AI truly contribute to transforming the system. The integration of Artificial Intelligence (AI) into the Italian tax system represents a significant area of transformation that requires an in-depth analysis of the technical, regulatory and ethical. The recent delegation law for the revision of the Italian tax system has opened the door to the use of AI to optimize tax control and fight tax evasion. However, despite this promising direction, the lack of details in the implementing decrees still leaves many open questions regarding the practical implementation of these technologies and the guarantees for the protection of personal data and taxpayers’ rights.
To fully understand the impact of AI in the Italian tax system, it is useful to examine the experiences of other countries, such as the United States, where the Internal Revenue Service (IRS) has already started the systematic use of AI to investigate fraud. ‘tax evasion.In this context, AI has proven useful in detecting discrepancies between tax returns and financial data, flagging potential cases of tax evasion and facilitating communication with taxpayers. AI can improve the efficiency of tax control, but it is essential to balance this advantage with the protection of taxpayers’ privacy and rights. The Guarantor for the Protection of Personal Data has already expressed concerns regarding the privacy of taxpayers and has highlighted the need for an active role in ensuring that the use of AI in the tax system respects the principles of protection of personal data.
Alessandro Fiorentino