Over the last few years, the Province of Córdoba – a subnational jurisdiction of the Argentine Republic – has been implementing various actions and mechanisms aimed at establishing a “New Administration”, oriented towards simplification and digital-technological modernization as clear and concrete pillars that are essential for any design, proposal and/or coordination of administrative innovation policies, necessary for the effective application of AI in public management.

Thus, Law No. 10,618 on the Simplification and Modernization of the Administration established that the activity performed in the exercise of the administrative function must be developed through information and communications technologies (ICT), so that the relations between people and the Administration, as well as between the agencies and entities that make it up, are channeled entirely by electronic or digital means.

In the context of the simplification and modernization of the provincial Public Administration, adjustments and adaptations were conducted in the general part of the Tax Code – Law No. 6006 TO 2023 and its amendments, as well as in complementary and regulatory norms. These amendments aim to incorporate from a tax perspective the principles of modernization, harmonization and simplification, seeking to facilitate and reduce both the tax and administrative burden for taxpayers. Likewise, concrete actions were promoted aimed at strengthening the relationship between the treasury and taxpayers, promoting stability and legal security in key aspects of such interaction.

In a doctrinal collaboration with CIAT[1], the significant progress achieved by the Province of Córdoba in incorporating into its tax system the typification of the rights and guarantees that assist taxpayers and/ or responsible persons in the field of tax procedure was highlighted. This development represented a very important step towards the consolidation of a more transparent, equitable and respectful system of legal guarantees in tax matters.

As a continuity of this process, the different tax administrations (TAs) have been implementing technological adaptations for the use of artificial intelligence (AI). In order to optimize the processes of management, supervision and control of tax obligations, the Province of Córdoba has been the first jurisdiction in the country that through Law N° 11015, amending the Tax Code has proceeded to incorporate within the main obligations of TAs, that of promoting the creation, development and maintenance of data processing systems or programs that allow guiding, assisting or responding, in real time, to citizens’ queries about conducting various administrative procedures (CHATBOTS, among others).

We understand that restricting or limiting assistance to different procedures would be due to the legal risk of the effects that a response on a certain tax framework (link) of the taxpayer could cause to the TAs, based on an automated response, structured through the existence of a predefined model or algorithm. Where appropriate, the provincial legislation provides that taxpayers and other taxable persons who have a personal and direct interest may submit duly documented binding consultations to TAs on the determination of taxes. It is clear that the interpretation of the law can be assisted by AI, but ultimately the responsibility for this should fall on the competent official, and this responsibility cannot be replaced or delegated by the use of AI.

Another change included in the Law under analysis is that the TA is obliged to guarantee taxpayers and responsible parties that, in debt determination processes where AI tools are used, the final tax determination will always be made and validated by a human professional. In this way, it is intended that the use of advanced technologies in tax procedures does not affect the rights of taxpayers, preserving the necessary human supervision and validation in such processes.

This approach is crucial in a context where the use of artificial intelligence in public management generates concerns related to transparency and fairness. Human intervention not only guarantees additional control over automated decisions, but also offers a tangible resource against possible errors or biases inherent in the algorithms used. This way, the regulations reinforce citizens’ trust in the tax system, ensuring that technological advances do not compromise the principles of justice and legality.

On the other hand, in order to ensure transparency in the use of artificial intelligence (AI) in the ex officio determination procedures of tax debts, it was incorporated within the rights and guarantees of taxpayers, that the audited subjects should be informed when the tax agency uses AI tools to detect differences or omissions in their tax returns and, where appropriate, specify the objective criteria on which the AI model is based[2].

Finally, and under the axiological consideration that AI could not validly replace the subject in the legal logical construction of the ex officio determination, the rule specifies that the Management may define different models, processes and/or data algorithm instructions related to the taxpayer and, at the same time, linked to the verification of the taxable facts. The purpose of this is that, using artificial intelligence (AI) tools, the administrative judge is provided with sufficient elements, parameters and/or indicators to estimate the taxable matter ex officio.

This approach reflects a balanced view on the use of AI in the legal-administrative field, where its value is recognized as an auxiliary tool, but not a substitute for human reasoning. By emphasizing that the logical legal construction remains under the authority of the judge, the norm reinforces the centrality of human deliberation in the decision process. In addition, the design of algorithms aimed at identifying and verifying taxable facts poses a technical and ethical challenge: ensuring that AI models are transparent, auditable and free of bias, so that decisions are fair and equitable.

Conclusion.

The Province of Córdoba, through the various modifications made to the Tax Code and other complementary regulations, has made significant regulatory advances aimed at tax modernization, harmonization and simplification. These efforts facilitate and reduce the tax and administrative burden of taxpayers, while contributing to the strengthening of the tax-taxpayer relationship through legal stability and security in key aspects of this interaction.

The model implemented by the Province of Córdoba stands as a reference for the various Tax Administrations that wish to embark on a similar path. This model promotes a regulatory commitment to transparency in the parameters, algorithms and data sources used, ensuring an ethical and equitable approach in tax procedures. This guarantees the protection of the rights and guarantees of taxpayers in the processes of determining and quantifying taxes.

Córdoba’s experience shows that tax modernization is not limited to the use of technology but requires solid regulation that supports its implementation in a responsible way. Transparency in the algorithms and data sources used, together with proper human supervision, are essential elements to preserve confidence in the tax system. As other jurisdictions consider following this model, it will be essential that they adapt these practices to their own regulatory realities, always ensuring respect for the principles of justice, equity and legal security.

[1] Perlati, Sebastián F. (2023). Rights and Guarantees of Taxpayers and the Obligations of the Tax Administration, in the Province of Córdoba. CIAT https://www.ciat.org/ciatblog-rights-and-guarantees-of-taxpayers-and-the-obligations-of-the-tax-administration-in-the-province-of-cordoba/?lang=en [29/11/2024].

[2] “m) To be informed in the course of the ex officio determination procedure established in Article 66 of this Code, when the tax agency uses artificial intelligence (AI) tools to detect differences and/or omissions during the audit process and, in that case, to specify the objective criterion(s) on which the model is developed with respect to the particular situation of the taxpayer. The same situation will correspond to be conducted in the determinative resolution when the Administrative Judge proceeds to use such a tool, in order to obtain elements, parameters and / or indicators to estimate the taxable matter ex officio.”

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