AI will have a very important impact on compliance but it will likely face teething issues, an in-house tax manager predicted at an ITR conference in London.
Isabella Barreto, group tax manager at payment infrastructure provider Paddle.com, made the prediction while speaking at ITR’s Indirect Tax Forum 2024 in London.
She was a panellist on the ‘Harmonising indirect tax across Europe’ panel at the event, which took place on May 21.
Also on the panel were Taxback International chief tax and compliance officer Lisa Dowling, Rackspace International senior tax manager Elena Gonzalez and FTI Consulting indirect tax managing director Nurena Tarafder.
Tarafder asked whether new emerging technologies like AI and blockchain will address difficulties concerning compliance across the EU within the next decade.
In response, Barreto said she sees that happening but emphasised that the future of such technology is uncertain.
“Even the best ideas take forever to implement and are going to find a lot of policy challenges and GDPR issues and what not,” she added.
Barreto said she imagines AI taking over repetitive taxes in the future, and gave compliance as another example of work likely to be simplified by AI.
However, she warned against placing too much stock in AI solutions.
Barreto said: “AI hallucinates, and we should not trust it with everything.”
She added: “But it does a pretty satisfactory job identifying patterns and repeating processes.
“It’s definitely going to have a very important impact in everyone’s compliance regimes and processes.”
Also during the discussion, Barreto explained why she finds tax to be an interesting field to work in.
She said: “[In] our job…we have to constantly translate new information and keep it up to date. We have to keep tracking all of the VAT registration thresholds, all of the VAT rates.
“Like any little, small change in legislation might affect us greatly. And this is all why our profession is interesting.”
Barreto added: “At the very beginning Nurena [Tarafder] mentioned sovereignty. And whenever someone says that tax is boring, I judge them very harshly because I think that tax is a measure and show of sovereignty of each state.
“And it is a challenge to harmonise it, which is why we’re all here brainstorming.”
Other panels at the event included ‘Gaining efficiency in a postponed ViDA environment’ and ‘Managing customs challenges through Europe’.
