Leveraging AI, Machine Learning, And Big Data For Enhancing Tax Compliance, Fraud Detection, And Predictive Analytics In Government Financial Management

Abstract

A review is given on the increasingly large investments made by public authorities in Fintech providing a number of technologies associating public finances to improve tax compliance, fight fraud in public procurement, and increase the yield of public funds, etc. A detailed list of these technologies include fiscal cash registers, e-Procurement, e-Invoicing, big data analytics, Artificial Intelligence (AI), Machine Learning (ML), distributed ledger technology, Blockchain, etc. The investments reviewed support a number of strategies such as increasing automation of tax collection tasks, performing of large-scale descriptive and predictive data analysis to guide individual decisions of tax auditors and policy planners, the countrywide constant top-down screening of VAT transactions to detect salient patterns of VAT fraud, and the development of natural language processing tools to process audit reports.
Digital technologies have the potential to radically increase the efficiency and effectiveness with which Government activities are performed. This potential has been lying latent for a long time, outside, perhaps, the Defense field, because public agencies traditionally procured technologies by “big vendors”. This habit is deeply consolidated, so that also in these years of extreme innovation few Government CIO’s consider to use commercial AI and Big Data software to automate the routine tasks that require the processing of large corpora of public text.