OPPORTUNITIES AND CHALLENGES OF IMPLEMENTING ARTIFICIAL INTELLIGENCE IN TAX ADMINISTRATION SYSTEM

Abstract

This study aims to explore the opportunities and challenges of implementing Artificial Intelligence (AI) in the Directorate General of Taxes' Core Tax Administration System (PSIAP) to improve tax administration efficiency and identify tax evasion, employing a qualitative research approach. The study investigates the role of AI in PSIAP and Customer Relationship Management (CRM) for enhancing tax collection and detecting risks. The results show that AI can significantly improve the effectiveness of tax administration, increase the tax ratio, and strengthen data-driven decision-making, although challenges remain in terms of taxpayer understanding, internal human resource limitations, and infrastructure costs. The novelty of this research lies in introducing the integration of AI into Indonesia's tax administration system, particularly through AI-driven analytics in CRM for detecting tax evasion. The findings contribute by providing solutions to national tax issues through improving compliance and increasing revenue with AI-enabled administrative enhancements.