The Australian Taxation Office (ATO) is employing Artificial Intelligence (AI) to detect tax evasion and fraud, working towards recovery of billions in unpaid taxes since 2018. The agency’s AI tax patrols focus on scanning data leaks, such as the Panama, Paradise, and Pandora papers, that have exposed financial wrongdoing on a global scale. AI helps convert unstructured data into useful feeds for intelligence analysts, illuminating integral documents requiring further review.
The ATO’s review of the Panama Papers until December 2022 has fetched over $242 million in liabilities, collected more than $60 million in cash and finalised over 535 audits and reviews. Additionally, the agency uses AI to enhance workforce productivity, allowing employees to concentrate on tasks needing human judgement and empathy.
The ATO also uses AI to track employers dodging superannuation payments, applying deep learning models to recover nearly $280 million in superannuation guarantee underpayments. By identifying risk-prone employers, AI helps more efficiently use resources to ensure employees receive the correct superannuation amount. Consequently, compliant businesses are less likely to be involved in unnecessary reviews, saving them time and resources. AI tools have been successful in identifying underpayments, assisting in raising around $295 million in liabilities.
The ATO’s AI interventions have also thwarted $2.5 billion in fraudulent payments, aiding in managing Australia’s largest GST fraud, Operation Protego. The ATO deploys gradient-boosting machine learning models capable of identifying rapid changes in GST fraud behaviour. The models refine the capacity to discern fraudulent GST lodgments swiftly, preventing any fraudulently claimed refunds from issuing.
Despite the advantages offered by AI tools, the ATO stresses the importance of data ethics and ensures human oversight in decision-making. As AI evolves, the agency focuses on balancing benefits with ethical considerations. Every applicable AI tool is tested against data ethics principles.
Overall, with AI’s incorporation into their system to detect irregularities, the ATO continues to send a strong message to those who consider dodging their tax obligations: tacitly affirming that these AI-enabled bots are adept in spotting discrepancies, indirectly encouraging honest tax payments.
