The Application of Artificial Intelligence and the Legal Guarantees of Taxpayers

Artificial intelligence has become part of the vocabulary of economic agents and citizens, and the public administration is focused on keeping pace with this technological development, which promises innovation and greater efficiency.
Implementing artificial intelligence in the core functions of a tax authority – revenue collection and the fight against tax fraud and evasion – although attractive from the point of view of efficiency gains, raises questions within the tax legal order regarding taxpayers’ rights, which must be safeguarded in any democratic state governed by the rule of law.
Our research aims to analyse, within the framework of Portuguese tax law, how the use of AI by the Tax Authority can be reconciled with taxpayers’ guarantees, taking into account the principles of the existing tax legal system and new challenges to guarantees, such as taxpayers’ privacy and data protection, algorithmic transparency and the fairness of new AI systems.
In this context, our work proposes ways towards achieving the desired balance of pressing needs, reflected in a new model of algorithmic tax governance based on transparency and cooperation with taxpayers, fostering broad acceptance of the new technology and which, from our perspective, may even motivate greater tax compliance.
Despite the enthusiasm surrounding the subject, our research concludes that there is still a long way to go, given the existing legislative shortcomings. The implementation of AI in the tax field requires a clear regulatory framework and robust mechanisms for supervision, transparency, and algorithmic auditing that are capable of ensuring a fair balance between administrative efficiency and the preservation of taxpayers’ rights.

Keywords: Artificial Intelligence; Taxpayers; Tax Authority; Taxpayer Guarantees; Big Data; Machine Learning; Algorithm; Privacy; Transparency; Fairness