Title: The potential of artificial intelligence in transforming tax administration: A comparison between Slovenia and the United States of America (BI-US-24-26-013)
Head of the research group: dr. Matej Babšek (1. 7. 2024 – 30. 6. 2026)
The emergence of artificial intelligence within tax administrations is anticipated to be a catalyst for significant improvements in operational efficacy and service quality. Namely, tax authorities can exploit artificial intelligence to detect anomalies, combat tax evasion, and efficiently process vast amounts of data, leading to fairer and more accurate taxation. Additionally, citizens and businesses will benefit from artificial intelligence-driven tools that simplify tax planning, reduce errors, and automate reporting, ultimately saving time and resources. However, ethical and privacy concerns, along with the need for robust regulatory frameworks, will be critical considerations in this evolving landscape to ensure the responsible and equitable use of artificial intelligence in taxation. The lack of research on the transformational potential of artificial intelligence in tax administration requires examining contemporary artificial intelligence applications across EU and OECD tax systems, including Slovenia and the United States of America, to understand the successes and challenges of early adopters and to underline the important role of artificial intelligence in driving forward a tax administration that is more responsive, efficient, and attuned to the digital age.
The main aim of the research is to examine the transformational potential of artificial intelligence to enhance tax administration efficiency and quality in Slovenia and the United States of America by considering a comparative perspective. The research will primarily focus on the main use cases of artificial intelligence in tax administrations (e.g., the automated provision of personalized information to stakeholders, virtual assistants, risk assessment processes, detection of tax evasion and fraud, assisting tax officials in making administrative decisions, recommending actions, making final administrative decisions, dispute resolution, and ensuring the integrity of tax administration systems and processes) and their implications for improving tax collection processes and reducing the shadow economy. The data for the research will be obtained from several sources, such as the Tax Administration Series Database from the OECD, World Development Indicators from the World Bank and Shadow Economy Estimates from Schneider. With a focus on Slovenia and the United States of America, the results will be compared within a broader EU and/or OECD context. Accordingly, several econometric models will be estimated by using the multiple regression analysis approach. Dependent variables measuring tax administration efficiency and quality (e.g., tax revenue, shadow economy, etc.) are regressed against the dummy variables capturing the main use cases of artificial intelligence in tax administrations (as listed above). Moreover, some control variables are further included in the multiple regression models (e.g., population growth, urban population, government expenditures, labour supply, physical capital, inflation, and trade).
The project tries to help strengthen the knowledge of policymakers in Slovenia and the United States of America. Moreover, the project embeds the important elements of scalability, as theresults will provide a framework for further empirical studies that are transferable to the international context. The exchange of specific knowledge and experience represents the added valueof the collaboration between researchers from Slovenia and the United States of America. The main aims of collaboration are the following: 1) to combine the theoretical and empiricalperspective of the presented research topic; 2) to establish a basis for future collaboration in research projects; and 3) to enhance/include collaboration between young scholars andexperienced researchers. All researchers involved in this project are experts in their corresponding fields. The proposed research will contribute systematically and comprehensively to thegeneral literature with new theoretical and empirical evidence. The empirical analysis will be embedded into a profound theoretical and methodological background. The results of thisresearch will contribute to academic and practical knowledge and will be helpful to researchers and practitioners in this field when exploring the further implications in both theory andpractice. Joint contributions are planned for selected international conferences. The outcome of the cooperation is also planned to be visible in the form of scientific papers published insome highly indexed (ISI) journals.
Duration (from/to):
from 1. 7. 2024 to 30. 6. 2026
Contracting Authority:
Slovenian Research and Innovation Agency
Project Partner:
University of Nevada (Reno), College of Business
Financing:
Memebers of the research group:
dr. Matej Babšek (head of the research team)
Members of the research group in the partner country:
dr. Mehmet Serkan Tosun
Objectives of bilateral cooperation activities
The main objectives of the cooperation are:
1) to combine the theoretical and empirical perspectives of the presented research topic;
2) to establish a basis for future cooperation on research projects; and
3) to strengthen/include cooperation between young and experienced researchers.
All the researchers involved in this bilateral cooperation activity are experts in their fields. The proposed research will contribute to the general literature with new theoretical and empirical evidence in a systematic and comprehensive way. The empirical analysis will be embedded in an in-depth theoretical and methodological background. The results of this research will contribute to academic and practical knowledge and will help researchers and practitioners in the field to conduct research in theory and practice. Complementarity will be exercised by combining theoretical and empirical questions. In addition, the bilateral cooperation activity is a good opportunity to involve young researchers in international cooperation, as both partners involve selected young PhD students or postdoctoral researchers in their research work. Students from both institutions will also benefit, as both leaders of the bilateral cooperation activity plan to present the main results of the research during their guest lectures at the partner institutions.Joint contributions to selected international conferences are foreseen. The outcome of the collaboration should also be visible in the form of scientific articles published in some highly indexed (ISI) journals.
