Artificial intelligence in tax consultancy

Chatbot, monitoring of legislation, tax return automation: what can AI do?

artificial intelligence in tax consultancy

“You snooze, you lose” is a warning commonly heard in discussions about artificial intelligence. The possibilities and areas where artificial intelligence in tax consultancy can be harnessed have long been addressed by WTS as one of the early adopters, particularly by its German headquarters. It was still 2018 when we published our first article on the topic. But six years have passed since then, and the above sentence clearly indicates that almost everyone, or at least every business that keeps up with the times, now needs to address the issue. But how, and what’s the best way to get started? How can you start to transform your workflows and deploy AI? And how can you use artificial intelligence in tax consultancy now, in 2024?

Level 1 

Today, even the life of a small business is shaped by a lot of processes. As an organisation grows, and processes become more complex, the need for clear, well-understandable systems and processes to define the day-to-day running of the business increases. To identify the workflows where AI has a place and a role to play, you need to have a clear view and understanding of what happens in the life of a business, and how. So the first task is to map your processes and think about what you are doing, why you are doing it, and where you can apply AI effectively. 

Questions and risks 

Once you have a good snapshot of your internal processes, you need to consider the benefits and risks of employing AI. Where you certainly need to be extra vigilant and careful is with protecting confidential data, GDPR compliance, and adhering to any other standards the business may have (e.g. ISO).

Human factor

All change goes hand-in-hand with stress, and it is natural that mistrust and resistance can arise when such technology goes live. It is crucial that staff get hands-on experience of the technology, test it and try it out. By asking questions to find a solution, you can train AI like a junior colleague, give it feedback, and you learn a lot about yourselves too: for example, the answers you get to the questions you ask often gives you feedback on the quality and wording of your questions. Ultimately, the answers provide feedback on your delegation skills, and it will also make it clear that one of the most effective learning methods is teaching itself. Initial fears and resistance can be markedly reduced if staff can gain an insight into the world of algorithms during this testing phase, and understand the potential and limitations of such a solution.

What role is there for artificial intelligence in tax consultancy?

In sectors such as tax consultancy that traditionally offer high added value, it is only natural to encounter human scepticism: many still doubt that artificial intelligence in tax consultancy is even viable. The situation is somewhat easier in the field of compliance services, since here (e.g. filling in tax returns, certificates, preparing calculations) we have been using automation and software-driven solutions for several years. Some of these solutions are proprietary developments, and there are also excellent products available on the market.

Yet artificial intelligence in tax consultancy can also help in other areas: both for tax advisers and their clients. Examples include the automation of tax returns, monitoring of tax liabilities, the development of tax optimisation strategies and communication with tax authorities.

This is how artificial intelligence envisions its own role in tax consulting

Chatbot, monitoring of legislation, tax return automation

Artificial intelligence in tax consultancy can be employed for client management and communication too: AI-based chatbots and virtual assistants can help tax advisers to liaise with clients and seek quick answers to tax questions and problems.

Algorithms can also help tax advisers keep track of updates to tax legislation. Artificial intelligence systems can analyse laws and regulations and assess their impacts.

The Hungarian tax system is converting to digital solutions at an extraordinary pace: artificial intelligence can be used to automate the process of completing and submitting tax returns. The individual algorithms can analyse data quickly and accurately, apply tax rules and regulations, and prepare or even file tax returns.

Strengths and weaknesses

Overall, artificial intelligence in tax consultancy offers the potential to increase the efficiency of tax processes, improve the quality of services and reduce tax risks. However, it is important that these systems need to be monitored and controlled, because alone they cannot yet ensure our commitment to client trust and data protection.

Finally, perhaps the important question is what does artificial intelligence itself think about its role in tax consultancy? If we were to say that we listened to its opinion when preparing this article, and used it to write the article, that wouldn’t be far from the truth.

An IT-based tax solution, thus the use of artificial intelligence in tax consultancy will achieve the most and be the most efficient if it is adapted to the company’s individual situation. That is why we at WTS Klient Hungary place high value on tailored implementation. Feel free to contact us if you want to simplify the taxation of your company with automated and digitalised solutions!

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