Monday, September 2nd 2019

India First Country to Deploy AI Machine Learning to Fight Income Tax Evasion

India is building a large AI machine learning data-center that can crunch through trillions of financial transactions per hour to process income tax returns of India's billion-strong income tax assessee base. India's Income Tax Department has relied on human tax assessment officers that are randomly selected by a computer to assess tax returned filed by individuals, in an increasingly inefficient system that's prone to both evasion and corruption. India has already been using machine learning since 2017 to fish out cases of tax-evasion for further human scrutiny. The AI now replaces human assessment officers, relegating them up an escalation matrix.

The AI/ML assessment system is a logical next step to two big policy decisions the Indian government has taken in recent years: one of 100% data-localization by foreign entities conducting commerce in India; and getting India's vast population to use electronic payment instruments, away from paper-money, by de-monetizing high-value currency, and replacing it with a scarce supply of newer bank-notes that effectively force people to use electronic instruments. Contributing to these efforts are some of the lowest 4G mobile data prices in the world (as low as $1.50 for 40 GB of 4G LTE data), and low-cost smartphone handsets. It's also free to open a basic bank account with no minimum balance requirements.
The tax-assessment AI doesn't just sniff for discrepancies in tax-returns between an assessee and its own taxable-income figure derived from crunching the person's financial-transactions and data; but is also capable of engaging in a meaningful questionnaire with a human assessee. It can build questions specific to certain transactions, as a human tax assessment officer scrutinizing your tax returns would, and can understand your natural language answers like a human would. It's also capable of understanding documentary proof submitted by the assessee as part of the questionnaire. If it's satisfied with your answers, it is legally empowered to close the case on your tax assessment discrepancy, or invoke human officers to take up further questioning and prosecution. The AI doesn't have judicial powers to prosecute someone for tax-evasion, yet.

Understandably, nobody is happy with this. High-ranking government officials within India's Finance Ministry think that the AI could be detremental to the country. "The whole objective of the faceless assessment is based on the premise that tax officers are corrupt and harass taxpayers. This is not only a biased notion but also undermines the genuine work of the tax department," a senior government official said. "It is not clear how these advanced technologies will help solve [problems with taxation]. In fact, they pose a greater risk of high-pitched assessment because tax officer not being interested in hearing out the assessee and will instead rely only computer data," they added. Source: Deccan Herald
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14 Comments on India First Country to Deploy AI Machine Learning to Fight Income Tax Evasion

#2
Kaapstad
It was a major step forward when a super computer managed to beat the world chess champion.

Unfortunately when it comes to money a super computer getting the better of an Indian is just not going to happen in my life time.:D
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#3
Crackong
Can it detect the "Administrator" sneaky adjusting his own pay grade in the database ?
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#4
Khonjel
I have so many conflicting views on almost each and every sentence in the OP.

On one hand I applaud this move. For that matter we should replace many more jobs like this in other govt. institutions too. Less corrupt mouths to feed, less bureaucratic red tape, more fair, more efficient.

The countries of the world all need to come together and come to a term to tax rich people and corporations, the high 1 percenters more not less. And fight tax evasion. What are they gonna do if every nation don't waiver their tax? Take their money to mars?

While I love the idea behind everyone having bank account and storing money there, I really dread the idea of cashless society. It's giving away too much freedom imo.

Lastly f--- that official. Ofc people are corrupt. It's not like the remaining people who'll oversee the AI/ML operation will be less corrupt. The goal of these automation should be for lessening the consequence of human tendency to corruption.
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#5
bug
That would be a fine counter-example of how to fix the problem.
To lower the amount of fraud, there is just one solution: simplify the rules. Anything else fails.
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#6
ZoneDymo
bug, post: 4108712, member: 157434"
That would be a fine counter-example of how to fix the problem.
To lower the amount of fraud, there is just one solution: simplify the rules. Anything else fails.
because the only reason for fraud is they rules just being too complex....
fraud is nothing but a simple mistake, its not like people just want more money or whatever.
Posted on Reply
#7
bug
ZoneDymo, post: 4108744, member: 66089"
because the only reason for fraud is they rules just being too complex....
fraud is nothing but a simple mistake, its not like people just want more money or whatever.
The only reason for being unable to detect fraud is complex rules/regulations, yes.
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#8
windwhirl
ZoneDymo, post: 4108744, member: 66089"
because the only reason for fraud is they rules just being too complex....
fraud is nothing but a simple mistake, its not like people just want more money or whatever.
I'll have to disagree on that. You can simplify as much as possible, but if the tax pressure is too high, people WILL go to the black market, and will definitely evade. I'd know, living in a country with a tax pressure between 50 and 65%, made even worse because of inflation. The black market here represents around 40% of all the money moving around, and that's considering that every single invoice, receipt and bill must be issued through the government electronic systems...
Posted on Reply
#9
Vayra86
Khonjel, post: 4108697, member: 154148"
I have so many conflicting views on almost each and every sentence in the OP.

On one hand I applaud this move. For that matter we should replace many more jobs like this in other govt. institutions too. Less corrupt mouths to feed, less bureaucratic red tape, more fair, more efficient.

The countries of the world all need to come together and come to a term to tax rich people and corporations, the high 1 percenters more not less. And fight tax evasion. What are they gonna do if every nation don't waiver their tax? Take their money to mars?

While I love the idea behind everyone having bank account and storing money there, I really dread the idea of cashless society. It's giving away too much freedom imo.

Lastly f--- that official. Ofc people are corrupt. It's not like the remaining people who'll oversee the AI/ML operation will be less corrupt. The goal of these automation should be for lessening the consequence of human tendency to corruption.
Absolutely right, and this is the level of digitalization we should move towards.

But it has requirements we don't fulfill yet. First off, we'd need complete transparency for digitalized government control. Transparency is the only way to guarantee the system is fair. After all, its easy to 'learn' corruption. That also requires a completely different view on public and private information. Tax is already a hot topic with multinationals and 'fairness'. Complete transparency would allow us to actually do fair taxation, for once. Authenticity of data could then be guaranteed through blockchain - this is one environment where such a solution would do very well; its a chain of transactions after all.

Some of this is already happening by the way. In NL I no longer have to provide my income details, they are prefilled and collected for me, I get to double check them, and out comes the result.

windwhirl, post: 4108861, member: 175818"
I'll have to disagree on that. You can simplify as much as possible, but if the tax pressure is too high, people WILL go to the black market, and will definitely evade. I'd know, living in a country with a tax pressure between 50 and 65%, made even worse because of inflation. The black market here represents around 40% of all the money moving around, and that's considering that every single invoice, receipt and bill must be issued through the government electronic systems...
Those tax levels are not uncommon here either. Black market however is not quite as big. Also its hard to define 'too high' I think a better way to measure that would be the general wealth and how its divided in a country. If you're not cornered by taxation, its not that attractive to break the law.
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#10
AnarchoPrimitiv
Everyone likes to believe in the myth of technology's altruistic benefits for mankind, but in reality the primary initial uses for new technologies is always to expand and increase the ability of the institutions of authority to exercise ever greater control over the populace and always to an ever finer and more intrusive degree. Ai isn't going to be used to figure out solutions that would benefit mankind (unless they are somehow profitable to a select few), it's going to be used as a means to have technology permeate to an ever more deeper level into our personal lives.
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#12
remixedcat
AI flags battlebots videos as "animal cruelty" ...
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#13
Khonjel
AI will probably flag hardcore prawn as domestic violence lol
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#14
R-T-B
remixedcat, post: 4109736, member: 84450"
AI flags battlebots videos as "animal cruelty" ...
Yeah, numbers and patterns are something computers are a bit better at, making that kinda irrelevant here.
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