State of use of AI tax systems
Publicly-available sources indicate that Malta Tax and Customs Administration (MTCA) lies among the last tax administrations to integrate machine-learning to perform their prerogatives. Since 2023, MTCA has partnered with SAS to enhance their technological capacities and modernize their institutional processes.
What functions are performed with AI?
1. Social network analysis (SNA): MTCA has integrated a visualisation tool offering an integrated real-time view of the taxpayer and its network.
2. Risk detection: MTCA deployed a data matching AI system which compares wealth based on public sources with the figures declared in VAT returns and tax declarations. Reportedly, a similar system is already in use in the UK, New Zealand, the Netherlands, Ireland and Canada.
MTCA uses an additional risk detection AI system to draw data from different registries and provide an assess of a taxpayer’s liquid and illiquid assets. This helps MTCA identify taxpayers whose declared income is not proportional to assets owned.
3. External risk-management (risk-scoring): The system segments taxpayers into risk categories, to devise a treatment strategy and annual audit plans. MTCA risk-scoring tool processes any data in the Data Warehouse, including third-party information.
What data can be processed by these systems?
The exact data processed by these AI systems was not specified by MTCA. Reportedly, a number of these systems have accessed to the entire Data Warehouse.
Are these systems regulated by specific norms?
The use of AI systems by MTCA is not subject to any specific norm.
