STARI Lunchtime Seminar

Inland Revenue’s Growing Use of Artificial Intelligence in Tax Administration – Should We Be Concerned? New Zealand’s Inland Revenue, like many sophisticated revenue authorities globally, is actively embracing the use of artificial intelligence (AI) to enhance its digital platforms, increase the levels of taxpayer compliance, and create greater efficiencies with respect to resource use. The use of AI comes with benefits and risks, which need to be very carefully balanced so as to ensure the rights of taxpayers and citizens are protected. While the AI evolution cannot be ignored, the New Zealand government has appropriately recommended a cautious but potentially risky approach with extensive pre-testing before AI products are utilised externally. However, there is no intention to create bespoke legislation to protect New Zealanders’ rights, but to rely on existing legislation concerning privacy and other rights. This paper positions Inland Revenue, one of the more advanced public sector organisations in New Zealand, as adopting AI within the wider New Zealand public service mandate and globally within Organisation for Economic Cooperation and Development (OECD) guidance. The paper concludes that the early evidence suggests that Inland Revenue is taking a cautious approach, although there is cause for concern with the rapid rolling out of Generative AI (Gen AI) tools and previous occasions when this cautious approach has not been adopted (such as with the data hashing experiment).