Experts advocate adoption of AI for effective tax administration

Experts have urged tax professionals on best practices in integrating artificial intelligence (AI) and emotional intelligence (EI) to achieve an effective tax administration.

The experts spoke at the Chartered Institute of Taxation of Nigeria’s (CITN) fourth Seminar on Information, Communication and Technology (ICT) and Taxation.

Speaking on ‘Balancing AI and EI in Tax’, Certified EQ Master Coach, James Addison, said AI has immense potential to improve the efficiency of tax administration, but emotional intelligence is crucial for ensuring that the advancements remain fair, transparent and compassionate.

He said by integrating both AI and EI, tax authorities could build trust and improve taxpayer compliance.

Addison, who stressed the challenges of AI in tax administration, also mentioned the key benefits to include efficiency, accuracy and personalisation.

Noting that tax experts’ productivity is directly proportional to his/her emotional health, he said the emotional dynamics in taxation that might ensue could be fear, anxiety, frustration, disappointment and hopelessness.

Also, a professor of practice at the University of the District of Columbia, Washington DC, Dr David Akanbi emphasised how it could help organisations and tax experts tailor their opportunities and threats.

He called for upskilling and reskilling on the use of Al to enhance productivity and achieve an intelligent tax system that would adapt to the changing population.

The don maintained that if an intelligent tax system works well in a country, the citizens will enjoy the dividends of paying their taxes through the provision of basic amenities to the people by the authorities.

Noting that the Nigerian government has an archaic system of distributing benefits to the citizens by doing more digitisation without optimal transformation, he called for a bill to enforce an intelligent tax system where every citizen gets the benefit of being taxed.

CITN President Samuel Agbeluyi said as tax professionals, there was a need to add value and show competence.

Also highlighting some ‘Challenges in AI Integration – A Practitioner’s View,’ a practitioner in finance and taxation, Akeem Ogunseni, hinged them on data quality and availability, competence gaps, and cost and resource allocation.

Noting that tax scenarios could be highly complex and context-specific, he said AI systems must be capable of understanding and interpreting the complexities accurately, which could be challenging given the variability in tax laws and individual circumstances.

In addressing biases in AI algorithms and ensuring that AI decisions are explainable and justifiable is essential, Ogunseni emphasised accuracy and reliability as well as scalability.

Earlier, Chairman of ICT Committee, CITN, Dr Caroline Ndubuisi, who acknowledged that the tax profession holds a pivotal role in national development, said through strategic adoption of ICT and AI, members can elevate their practices, improve compliance, and drive the nation’s economic growth.

She said the event continues to serve as a beacon of innovation, bringing together thought leaders, professionals, and stakeholders committed to advancing the tax profession in an increasingly digital world.