China prepares to unleash artificial intelligence to catch tax cheats

Researchers involved in project say it will make it almost impossible to avoid detection, while the current fragmented system is easier to get around

Concerns about economic impact may delay its introduction as many private firms rely on informal deals with local tax authorities to limit the amount they pay

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The current system of detecting tax avoidance is inefficient and relies on labour-intensive inspections. Photo: Reuters

Published: 9:40pm, 24 Dec 2019Updated: 12:54am, 25 Dec 2019

Chinese scientists have been working on a system to use artificial intelligence that would make it almost impossible to cheat on taxes, according to researchers involved in the project.

Over the last three years, about 300,000 government tax inspectors have been helping to train an AI system that draws on big data to detect behaviour that may be hard for human inspectors to spot.

Now the machine can flag more than 95 per cent of offences, including some new ploys unfamiliar to most human tax collectors, researchers involved in the project said.

However, given the number of companies that rely on informal deals with local tax authorities to lessen their burden, the system’s introduction may be delayed until the economic climate is more favourable.

The AI engine has been embedded in the heart of the Golden Tax System, the software used by the State Taxation Administration, China’s top tax office.

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