“Keeping an eye on this from a global perspective is quite a challenge,” says Lewis, “but AI can provide both global and local information almost on a real-time basis, helping companies to identify the developments that are material to their business and giving them early warning as well as greater knowledge, oversight, insight and risk management at their fingertips.”
AI-powered technology is also being used to handle many of the routine, repetitive questions that tax teams get from business and finance stakeholders. “We’ve helped a client deploy a virtual assistant — in this case, a chatbot platform — to give tax advice to their finance teams around how they code and classify transactions from an indirect tax perspective,” says Brayne. “We worked with the client to generate the content and trained the chatbot appropriately to give the right answers.”
Stakeholders can now simply access the information by asking the chatbot a question. It’s on demand, so they don’t have to wait until the tax team is free to provide an answer. The chatbot can also ask clarifying questions when needed and if there are answers the chatbot doesn’t know, it will flag it to the tax teams. “Ultimately, end users are getting the right answer, quickly, and it’s being done by a machine instead of a human in the tax function,” says Brayne.
For Channing Flynn, EY Global Tax Technology Sector Leader, there is much to get excited about as we look further ahead. “In the future, AI will allow unprecedented reach and insight into data that will transform how transfer pricing comparables are done,” he says. “Currently, transfer pricing is more art than science and a major challenge for both taxpayers and governments alike. AI will also radically change controversy and planning – both time-consuming and complex areas. AI will allow companies to manage risk and do predictive analyses far more quickly and powerfully than is possible today. Companies will be able to gain rapid insight into case law and procedural challenges and all that’s available in the public domain to help inform a tax strategy or to update tax compliance procedures for new law.”
With the rapid developments in machine learning, data mining and cognitive computing, the next decade promises to see huge leaps forward in AI. “As powerful as AI is today, it is still in its infancy,” says Flynn.
People and machines: better together?
While the potential benefits of AI are huge, there are some well-publicized fears to overcome. Foremost among these is that AI will replace humans, but Flynn is keen to reassure that an alternative reality is more likely. “AI will enable tax professionals to work better, smarter and faster, which will mean that they can spend more of their time providing more valuable activities for the organization, from managing risk to partnering with the business on its strategic projects and priorities,” he says.
Moreover, AI will create new roles that never existed before, such as solution architects who need to know both technology and tax, and enhance the ability of the tax profession to attract and retain the best and the brightest, according to Fiore. “The higher-level, higher-tech work that AI allows will encourage the best and brightest to enter the profession, it will help them learn faster and it will provide greater career satisfaction,” he says.
It is also important to note that there are some things AI cannot do, including providing human skepticism, interpretation and judgment. “AI will not do away with the need for human experience and insight,” says Flynn. “Highly qualified and skilled tax professionals with sound judgmental minds will still be needed to make good decisions about what an AI-powered machine concludes or recommends.”