INTRODUCTION.

The ongoing coronavirus pandemic has led many tax administrations (TAs) to close their offices and move quickly towards e-government.

As a result, and specifically in the information and assistance function, they have had to strengthen the digital contact channels and quickly migrate to what is known as the virtual office in order to ensure the continuity of their operations.

In this regard, many TAs were already using virtual conversational assistants (VCAs) for information and assistance to taxpayers.

Basically, VCAs guide users through simple tasks, providing specific and appropriate responses in real time, allowing citizens to self-manage.[1] The most representative examples are Apple’s Siri, Amazon’s Alexa, Google’s Assistant, or Samsung’s Bixby.

By contrast, “chatbots”[2] are applications that use conversational interfaces to enable intuitive interactions between people, devices, and services; and on the other hand, there are “virtual tutors” that offer specialized knowledge and personalized tutoring, helping people solve problems and make decisions.[3]

VCAs are based on artificial intelligence (AI) and could in principle overcome some of the problems presented by the face-to-face taxpayer care model, as they can provide permanent, faster and more affordable service at lower costs and without physical contact, a vital aspect at this time of the pandemic.

For this reason the objective of the present post will be to review some TAs that already use this type of technology and its main benefits and problems, to finally formulate some tips that they should consider when incorporating or empowering them.

EXPERIENCES OF USING VCA IN TA. BENEFITS AND PROBLEMS.

In relation to the potential benefits for TAs of incorporating VCAs into the information and assistance function, the following aspects have been highlighted:[4]

• Provide services to the taxpayer 24 hours a day, seven days a week, without interruptions.
• Provide consistent information, avoiding the risk of different or incomplete interpretations.
• Increase the user care productivity, as it is possible to handle more cases in the same period of time.
• This increased productivity helps releasing some of the staff to perform other tasks.
• Eliminate wait times (face-to-face and telephone) due to unavailability of operators.
• Provide increasingly accurate responses and, consequently, increasing improvements in user satisfaction, as AI-based VCA collects data and learns from interactions.

In relation to the most common problems in the use of VCAs, we highlight the difficulty of improvising, which can give wrong answers if VCA ends up lost in conversation (”lost in translation”) and the difficulty of retaining the user since many people, for a cultural issue, prefer to always communicate with other people.

Regarding their use in the TAs, it is noteworthy that the AEAT of Spain developed a VCA using the Watson platform of cloud technology, which is able to answer the questions asked.

The welcome message to the user includes a warning about the legal consequences of the responses obtained, among other issues.

According to the Spanish newspaper Expansion (2018), since the implementation of the assistant, the Tax Management Department of the AEAT recorded an 80% reduction in the number of emails received: from 900 messages per week, to 165. For its part, queries through the virtual assistant increased tenfold: from 200 requests in the first week of use, to a peak of 2000 in November 2018.

At the AEAT[5], the virtual assistant for VAT currently offers information on Foreign Trade, change of tax base and rectification of deductions, real estate transactions, invoicing and registration, subjection and exemptions and also offers tax information on the immediate supply of Information (Books Registration of VAT through the electronic headquarters of the AEAT).

In Australia, the ATO (Australian Tax Office) developed the virtual system “Alex” to provide assistance to taxpayers, which recorded more than two million conversations in the first year of launching (2016). Its function is to assist individuals and companies with questions and queries related to taxes, property rights, income, and deductions, filing returns and taxes. Alex, provides direct access to the content that is being searched, in this way, the user saves time and generates a better browsing experience.[6]

In the UK, the HMRC also launched a VCA, “Ruth”, which can answer simple questions and provide links to websites.
In Finland, “VeroBot ” provides all information concerning the country’s trade and labor taxes.

In Brazil, a VCA called Teresa[7] has been developed, which is available 24 hours a day, seven days a week and helps solve the most frequent requests of taxpayers.

In Peru, the SUNAT also put into operation a VCA, “Sofia”. It provides information on the 2019 Annual Income Tax Return and the fourth category income.[8]

In Guatemala, the SAT also launched a VCA, “Rita ” that resolves doubts immediately; it has the ability to solve 2500 questions.[9]

These are just some of the VCAs used by the TAs that I have detected.

It is also anticipated that in the future, a VCA may be integrated with other digital services provided by the TAs, e.g. making payments, and verifying tax files.

To do this, these integrated services must be available digitally, that is, we will only be able to integrate those services that are digital and where interoperability can operate.

Another possible development on the subject is that the tax VCA could also be integrated with other VCA within the TAs themselves or other agencies in the country to facilitate consultation in any public VCA and referral to another specialized VCA.

This technique is called “orchestration” and refers to the automatized configuration, coordination and management of computer and software systems.

TIPS TO INCORPORATE OR ENHANCE THE USE OF VCAs in TAs

It is important first of all to analyze the context and incorporate technology only if necessary, i.e. not technology as a fashion, as there are many experiences that have not been positive.

It is advisable to analyze the best practices of the field and then see what problem we need to solve in order to identify which manual work can be eliminated or increased through the AI, and what additional information can be generated from the machine.

As with any ICT project to increase the chances of success, the highest authorities of the TA must be involved from the very beginning and carefully follow its implementation.

The resources needed or sources of funding for VCA mainstreaming projects are also important.

In the TAs there is always a dilemma between buying ICTs, developing them internally, or outsourcing the process.

There is no uniform opinion on the subject and the choice will depend on the type of TICs to incorporate.

But there is full agreement among experts that taxpayers’ data should not be passed on to third parties.

Some key aspects should be carefully analyzed, such as implementation times, costs, personnel management (recruitment, training), the need for own infrastructure, flexibility to make modifications and maintenance of product quality.

It is always recommended to start with small universe test projects to measure results prior to generalization. It is important to have spaces for experimentation of new services and new controls, which allow validating hypotheses of new management models without harming the current operation.

In AI, as in any computer system, maintenance and update processes are critical. Therefore, a good practice is to have specialized external advice to ensure the appropriation of advances by the institution’s team, such advice can be given through agreements with universities or contracts with specialized companies.

A not insignificant aspect is the normative changes to be developed, for example, what value the information provided by the virtual assistants will have in relation to the country’s tax legal system.

Directly linked to this issue is the fact that in this as all ICTs that are incorporated must ensure the protection of the rights of taxpayers. In this regard, the topics of computer security, cybersecurity and data protection of taxpayers are key.

It is also necessary to consider whether or not modification of the structures of the TAs is required to incorporate these ICTs, such as creating unified data analytics areas at the central level.

Of course, human resources are also vital, see the new profiles of officials required and especially the digital skills that will have to be met.

FINAL REFLECTIONS

The efficiency of TAs, today more than ever, is strongly associated with the proper use of ICTs and the quality of IT services. It is essential to manage them properly, since the activities of the TAs are increasingly dependent on the processing of data and information, therefore data governance becomes strategic.

I understand that virtual assistants will continue to be incorporated into many TAs, for which we should not lose sight of the fact that ICTs are a tool for them to be more efficient and effective in their task of raising the levels of voluntary compliance and not an objective per se, that is, it is clear that it is not desirable to incorporate ICTs “as fashion”.

I believe, in turn, that the coronavirus pandemic will further enhance this tool, especially because of the issue of digital attention, i.e. without physical contact.

Artificial intelligence, and particularly this topic on VCAs present a scenario of disruptive changes for the TAs in the medium and long term.

Throughout this process, TAs must always respect the rights and guarantees of taxpayers, in accordance with the legal framework in force in each country, avoiding the biases and risks that the incorporation of VCA may generate.

[1] Antonio Seco, Andrés Muñoz – Virtual conversational assistants in tax administrations. IDB, September 2019.
[2] Accenture (Accenture Federal Services, 2018)
[3] In https://www.randstad.es/tendencias360/retos-de-incorporar-asistentes-conversacionales-en-los-modelos-de-negocio / distinguishes between Bots that run automatically and repeatedly, but does not involve maintaining a conversation. Chatbots and voicebots: the difference is that chatbots do hold a conversation, but the input and output response is via text, while voicebots is via voice. Finally, virtual assistants with able to maintain a fluid and open conversation.
[4] https://blogs.iadb.org/gestion-fiscal/es/el-potencial-de-la-inteligencia-artificial-en-la-administracion-tributaria-el-caso-de-los-asistentes-conversacionales/
[5] https://www.agenciatributaria.es/AEAT.internet/Inicio/La_Agencia_Tributaria/Campanas/_Campanas_/Herramientas_de_asistencia_virtual/Herramientas_de_asistencia_virtual.shtml
[6] https://observatorio-ia.com/12-chatbots-para-e-governments
[7] https://blogs.iadb.org/gestion-fiscal/es/asistentes-virtuales-tributarios-continuidad-de-negocios-durante-coronavirus/
[8] http://www.sunat.gob.pe/institucional/contactenos/virtual_asistente_Sofia.html
[9]https://portal.sat.gob.gt/portal/soporte-chat/

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