Artificial Intelligence in Tax Administration: Enhancing Compliance, Transparency, and Ethical Governance

Abstract

This article explores how Artificial Intelligence (AI) can enhance tax administration by improving compliance, increasing trans-parency, and addressing ethical and regulatory challenges. It specifically analyzes the role of natural language processing (NLP), machine learning (MI), and intelligent chatbots in simplifying complex tax legislation, thereby enabling more effective taxpayer interaction with tax authorities. Through an examination of Al implementations in selected countries, the paper illustrates tangible improvements in compliance processes and transparency. Additionally, the discussion critically addresses the ethical concerns and practical challenges associated with AI deployment, including data privacy, potential biases, and compliance with regulatory frameworks such as the EU AI Act. The article concludes by emphasizing the necessity of balancing technological advancement with robust governance mechanisms to maintain taxpayer trust and promote equitable outcomes.