The Organisation for Economic Co-operation and Development (OECD) has released a new report addressing the complexities of using Artificial Intelligence (AI) in tax administration. On September 18, 2025, the OECD published “Governing with Artificial Intelligence: The State of Play and Way Forward in Core Government Functions.” This report explores the growing reliance of tax authorities on AI tools and the potential risks and challenges involved.
Main Risks of AI for Tax Authorities
AI offers powerful ways for tax authorities to analyze vast data, detect fraud, and improve efficiency. However, the OECD warns that unchecked adoption may lead to significant issues. These include data privacy concerns, the possibility of bias in AI algorithms, and the risk of over-reliance on automated decision-making.
OECD’s Recommendations for Moving Forward
The OECD urges governments to set clear guidelines for the use of AI in public administration. Transparency, accountability, and oversight are critical to ensure AI serves the public interest. The report suggests ongoing training for tax officials and regular audits of AI systems. By addressing these risks, tax authorities can fully harness AI’s benefits while protecting taxpayer rights.
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OECD Risks & Challenges of Tax Authorities Use of AI
