3. Main conclusions of the research.

Important conclusions can be drawn from this research:

The first is that today, not all TAs have an AV and, likewise, we are facing an incipient issue since those that have implemented them date from recent time, the oldest having started 4 or 5 years ago, with 2016 in Australia being the oldest case.

Even many TAs have their VAs in an experimentation stage and thus inform the taxpayers, as, for example, in Canada where regarding the AV “Charlie“ it is said that “I am a pilot project, I am still learning. I may not have all the answers.”

The other conclusion is that the issue of their functionalities of these VAs has been increasing. In most of the countries analyzed, it started with basic questions such as frequently asked questions about a certain topic or tax and then new features or applications have been incorporated to other taxes or topics, which indirectly proves that they have had successful results.

To cite recent examples, in Brazil, the Federal Revenue, in May 2021, launched an VA to guide taxpayers in filing their Personal Income Tax return.

And then, in October 2021, they developed a new VA, called “Leon” that guides users in the registration of customs agents and assistants and in accessing customs systems, addressing, therefore, the interveners and companies that operate in foreign trade.

Another conclusion is that many of the TAs investigated also plan to incorporate new VAs, considering the successful application of the existing VAs.

For example, the State Tax Administration Agency (hereinafter, AEAT) of Spain in the Annual Tax and Customs Control Plan of 2022 says that the design of a Virtual Assistant for the income tax will begin with a dual purpose: to answer, through the use of AI, the queries made by taxpayers about this tax, initially related to real estate capital returns and to obtain information about what are the most common doubts of taxpayers in this matter so that the knowledge base of the tool itself is fed back via these data.

In this first phase, the issues related to real estate capital returns and imputation of real estate rents will be analyzed.

Likewise, progress will be made in the design of the so-called “Census Assistant” as an assistance tool for the formalization and presentation of the census declaration, with the incorporation of necessary information for the correct fulfillment of the tax obligations.

In fact, this census assistant is already underway and, likewise, the AEAT has been developing new VAs, which means, as we have indicated, that the TAs consider its implementation and generalization as highly positive.

However, on the contrary, we lack critical, external and systematic evaluations of these VAs, lacking the necessary counterpoint to a very optimistic vision of these technological instruments.

Today, in the TAs that we have reviewed, the VAs are used, in general, for the citizen’s information and assistance functions. But it is likely that, in the near future, their use will be extended to other functions such as human resources, control and collections, to name just a few.

In fact, some uses of VAs for collection are already in progress, of course from the AEAT, with its payment term calculators.

An additional step could be to integrate the VAs of the TAs with those of other public entities of the country. Thus, for example, in Estonia, the tax VA is integrated into many consultations and information related to the country, pretending to become an “ambassador” of the country.

That is, it has already been incorporated into other government functions beyond those of the TA itself.

Another aspect to highlight is that the TAs investigated regularly measure the performance of the VAs and, in most cases, the rates of assertiveness in the response are positive and have been increasing.

To mention some cases, in Sweden, the percentage of resolution in conversations with Skatti has varied between 78 and 83%. In Australia, 94%. In Russia, TAXIK has proven to be an effective and useful service with 75% of the total responses always responding to the taxpayer’s query. In Guatemala RITA had a 75% rate of satisfactory answers.

In Peru, SOFIA generated a percentage of understood messages that were 74% in 2019 and 93% in 2020.

However, the quality of the VAs cannot be measured simply with this indicator, an index that, on the other hand, comes from the TA itself; therefore, it would be essential to have some kind of audit of the results of these VAs, derived from external auditors.

Another conclusion of the study is that not all countries have specified what legal value the answers provided by the VAs to taxpayers have, this, in our opinion, being, on the one hand, a new indication of the crisis of legal formalism and the principle of legality of tax systems, but also a manifestation of one of the drawbacks of the system: the difficulties in knowing their legal effects both for the taxpayers and for the TA itself, which, undoubtedly, limits their possibilities and entails an undoubted restriction for their usefulness as an assistance and information tool for taxpayers.

Certainly, some legal systems are trying to react to this problem; thus, in Spain, the VA itself allows, in many cases, the PDF copy of the response and it is expressly indicated that, in accordance with the provisions of article 87 of the basic rule of the Tax System, Law 58/2003, of December 27 (General Tax Law), the response of the VA has the character of mere information of the existing administrative criteria for the application of tax regulations.

However, the GTL itself does not expressly foresee the legal effects of this form of official response of the TA and the doctrine debates its consequences, for example, in the event that the TA subsequently changes its criteria.

That is, if the taxpayer wishes to submit a written tax query regarding the tax regime, classification or qualification that corresponds to him, he must address, in a formal, legally regulated manner, as established in Articles 88 and 89 of the General Tax Law, to the Directorate General of Taxes as the competent body for the preparation of binding replies and only this modality of response from the TA has legal consequences specified in the General Tax Law itself.

However, it should be noted that, in all the cases investigated, the possibility of referring the taxpayer to another information and assistance channel is always foreseen, undoubtedly, because the TA itself is very aware of this legal-regulatory restriction on the use of the VAs.

4. Final considerations.

The ChatGPT can be described as a new, more advanced stage in the development of the VAs and, therefore, its early incorporation into the TAs can be foreseen; therefore, the first conclusion is the need to review the use of the current VAs and regulate, in an appropriate way, their legal consequences.

An independent evaluation of their operation, costs, advantages, disadvantages, etc. also seems essential to us, since the official literature usually only offers us a “rosy” perspective of the VAs.

In many countries the VAs have been very important to continue providing information and assistance to citizens during times of closure of official offices during the pandemic, but they are going to stay in their daily operations, which should entail a careful reflection on whether or not the tool used should undergo an adjustment to the new standard conditions.

It is also vital that TAs know how AI works, with its benefits, risks and biases and see, specifically, what the problem or problems are that they want to solve by incorporating technology, putting an end to some optimistic currents that believe that any tax problem can be solved by incorporating the appropriate technology.

It is key to analyze the context in which each TA acts and incorporate technology only if necessary, that is, not technology because it constitutes a “fashion”, since there are many experiences that have not been positive in this regard.

It is also very convenient to analyze the best practices of the subject, looking, for example, for public-private collaboration mechanisms or analyzing the experiences of other TAs.

The VAs should not be implemented in Modern TAs casually, incipiently or in isolation, generally, to improve the image of the TA itself as a modernizing entity. They only make sense within the framework of an integral project, of a certain model of link between administrative activities and the taxpayer’s behavior.

In short, the integration of any VA, now the ChatGPT, requires planning.

As we saw in this article, the introduction of VAs in TAs has advantages, but also poses disadvantages, risks and biases that must be carefully evaluated within each country.

It will be necessary to analyze whether the TAs should make, before generalizing the use of VAs in different tax procedures, changes in their structures, processes, functions and, also, in legislation; in such a way that, in the use of AI and algorithms, the rights of citizens are always guaranteed.

Let’s not forget that the use of the VAs results in consequences for taxpayers affecting their fundamental rights. The rights of taxpayers are subject to a variety of formal legal sources for their protection. They are part of national legislations and constitutions, as well as international treaties and conventions, and it is necessary to be very precise when it comes to knowing whether a particular VA affects or does not affect such rights.

Therefore, a very important aspect is to legislate what tax legal character the answers provided by the VAs to citizens have, and legal reforms in the Tax Codes are needed in this regard.

It will be vital to also analyze the architecture of the VAs and, above all, measure their performance completely, not simply in percentage of appropriate responses, to see if, for example, taxpayers’ rights are being violated or if they are efficient in their work.

We recommend developing a harmonized design of the VAs within each country and ideally, at the international level, there should also be coordination between the TAs in this field, because the VAs could in the future facilitate issues of international cooperation as happens in the area of tax information exchanges.

This harmonized approach would facilitate the relationship with taxpayers, by reducing the compliance costs that can occur if each TA designs a VA differently, for example, to access it.

In another registry, the courts are called to play a fundamental role in the effective control of the use of algorithms, since they will have to interpret when and how existing legal principles are applicable in this new field.

Remember that the issue of data, its storage, use and dissemination, is not a minor issue in our time and in our societies, since AI works with data, which is why, the results arrived at will depend on its availability and quality.

As we have seen in the aforementioned research, there are different types of VAs from the most basic “bots” to those conversational VAs, which are integrated into what is known as Virtual Offices, a phenomenon currently in full expansion.

From the survey conducted out in the different countries, it is clear that we are facing an issue that is incipient, in some cases, at the stage of experimentation since, at present, not all TAs have VAs and if they do, they are from recent dates, 2016 onwards.

However, most of the TAs that have initiated the process have been moving from mechanisms to answer frequent queries and simple questions to the incorporation of new tasks to be performed by the TAs, such as assistance in the preparation and submission of tax returns, and have also been improving their efficiency.

The arrival of the ChatGPT will only speed up the process described above.

It would seem that many of the ”call centers” that the TAs have today will migrate towards the VAs, at least as the first line of contact with citizens, without prejudice to which it is always worth highlighting the importance of contemplating different ways of caring for citizens, especially for those citizens who are being excluded, for very varied reasons, from digital connectivity.

The evolution of the taxpayer service models in the TAs suggests that, between the short and medium term, they will probably be based mostly on the VAs, for which, they must be accessible through many and diverse channels, trying to offer the same experience to users in each of them.

Such channels include the attention by means of “smartphones” (for example, through an TA application), computers (TA website) and social networks.

In short, we believe that, in the very near future, there will be a very important advance of the VAs for their application in other functions of the TAs, such as human resources and their management, the processes of monitoring and audits, the exchange of information and also in connection with other agencies of the country to facilitate consultations in any public VA and the referral to another specialized VA.

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