The Government of Pakistan to use Big Data and AI to find tax evaders

With Computer Science entering a new age of Artificial Intelligence and Machine Learning, many countries from around the world have adopted this method of computation in order to achieve maximum efficiency. Google and Tesla are the finest exponents in the implementation of AI and it is widely known that US military and government hire Google for a lot of projects.

With Pakistan facing a lot of corruption and tax evasion challenges, an efficient management system and smart implementation of technology is required by the government. In a recent National Assembly meeting Finance Minister, Asad Umar recently acknowledged the problems faced by the Pakistani government in finding tax evaders and hinted at using AI to identify tax evaders.

“Algorithms are now very advanced. Global tax collection agencies don’t rely solely on traditional methods for collection, they use modern technology. We want to use anonymized data to run algorithms which will help us identify tax evaders, he said.”

Implementation of Big Data and AI in Pakistan

Big Data is basically a huge abundance of real-world data that can be analyzed and used to predict a possible outcome for the future. With AI using this abundance of data, it becomes even more powerful when merged with machine learning and can help the investigation agencies in an unprecedented way. For example, if a person A is a known tax evader and his bank is aware of it. The bank would further have other information like where this person lives, his level of education, declared income, marital status. Similarly, another person B is not a tax evader and the bank is aware of his profile and therefore has access to his information regarding where he lives, his income, level of education etc.

This is where the huge potential of AI comes into play, through AI the machine will learn that people having characteristics similar to person A have a higher tendency of being tax evaders than person B. This computation basically narrows down a huge pool of people and shrinks it to a smaller set of people. The government can then carry on their investigation on this particular set of people acquired through AI.

If the implementation of AI is done right, then it will definitely increase the tax net in Pakistan, tax auditors will become faster and tax revenue collection will improve.