The French tax administration has intensified its fight against tax evasion by harnessing the power of artificial intelligence (AI) and advanced technologies. Pioneering these modern methods, the French tax authorities have spent the past decade perfecting digital tools to identify unreported property modifications, including construction projects like garages, garden sheds, or additional buildings.
For instance, the “Foncier innovant” initiative, initially piloted in nine departments in 2022, has been instrumental in uncovering undeclared pools using aerial imagery analysis. This program expanded nationwide the following year, starting with a successful detection of approximately 140,000 non-declared swimming pools, generating an additional 40 million euros in tax revenue.
The process involves an innovative algorithm comparing public aerial pictures from the National Institute of Geographic and Forest Information (IGN) with cadastral data. When the system identifies an unreported pool in the images, tax agents are alerted to verify the finding. Homeowners are then invited to rectify their tax situation if needed. Marina Fages, head of the cadastral bureau and the project, notes that this method avoids automatic tax assessments, ensuring a human judgment in the decision-making loop.
Amidst its promise of fiscal equity and efficiency, the system’s deployment has not been without its critics. Damien Robinet, a national secretary of the Solidaires Finances Publiques union, expresses concerns over the shift towards automation, which he argues could lead to job cuts and over-reliance on external vendors, initially including companies like Google and Capgemini.
Data mining operations within the tax enforcement arm are robust, employing data scientists searching through vast amounts of data, totaling six terabytes, to flag discrepancies which might indicate underreported income or outright fraud. Despite these powerful tools, the French tax authority is adamant that algorithms serve only as an aid to human auditors in detecting potential errors or fraudulent activities. Carole Maudet, deputy director of tax audits, reassures that the final call on tax inspections always rests with a human agent.
The use of AI to detect undeclared constructions by the French tax authorities introduces several important questions and challenges:
1. Privacy Concerns: The utilization of aerial imagery analysis raises questions about privacy. Is the tax authority invading the privacy of citizens by using such detailed surveillance techniques? The authorities must balance efficient tax collection with the residents’ rights to privacy.
2. Accuracy of AI Detection: How accurate is the AI in detecting undeclared constructions? While AI can handle vast amounts of data, there may still be a risk of false positives or inaccurate assessments that could unfairly target innocent taxpayers.
3. Transparency and Governance: Is there sufficient transparency and governance over how AI systems are used and the data they collect? Ensuring that there are robust systems in place for the oversight of AI tools is essential for maintaining public confidence in their use.
4. Legal and Ethical Implications: What legal and ethical frameworks are in place to govern the use of AI in tax enforcement? As AI applications become more pervasive, ensuring they align with legal standards and ethical principles is critical.
Now, let’s explore the key advantages and disadvantages of using AI in tax compliance:
Advantages:
– Enhanced Efficiency: AI can process large datasets rapidly, significantly improving the efficiency of detecting undeclared constructions.
– Increased Revenue: The detection of tax evasion leads to the recovery of lost revenue, improving public finances.
– Human Resource Optimization: By allowing AI to handle repetitive tasks, human agents can focus on more complex cases requiring human judgment.
Disadvantages:
– Potential Job Losses: Increased automation could reduce the need for human auditors, leading to job cuts.
– Misclassification Risk: The possibility of AI misidentifying legal constructions as undeclared can lead to disputes and trust issues in the tax authority.
– Vendor Reliance: Dependence on external vendors for AI technology might raise questions about data security and the potential influence of private companies on public tax enforcement.
The subject of AI in tax enforcement is a rapidly evolving field, subjected to ongoing debates and legislation. For more general information on artificial intelligence and its implications, you may visit the main domain of a global organization heavily involved in AI research, such as Association for the Advancement of Artificial Intelligence (AAAI). For a more detailed understanding of France’s tax policies and regulations, the official website of the French public finance authority would be a relevant resource, but please note that the inclusion of the official link is subject to verification that the URL provided is 100% valid.