Korea introduces counter-tax evasion system using AI in Latin America-led meeting

National Tax Service (NTS) Commissioner Kang Min-su, left, gives a presentation during the 59th general assembly of the Inter-American Center of Tax Administrations in Santiago, Chile, Wednesday (local time). Courtesy of NTS

National Tax Service (NTS) Commissioner Kang Min-su introduced Korea’s advanced system using artificial intelligence (AI) to crack down on tax evasion during a meeting of top tax officials mostly from Latin American countries, the NTS said Thursday.

The tax agency said Kang was a special guest at the 59th general assembly of the Inter-American Center of Tax Administrations (CIAT) in Santiago, Chile, from Tuesday to Thursday.

The center discussed tax authorities’ responsibility to respond to tax-related crimes among its 40 member states and relevant international organizations.

Over 30 CIAT member states are from Latin America, while the United States, Canada and some countries from Europe, Africa and Asia are also part of the group.

National Tax Service (NTS) Commissioner Kang Min-su, second from right, joins a panel discussion during the 59th general assembly of the Inter-American Center of Tax Administrations in Santiago, Chile, Wednesday (local time). Courtesy of NTS

Kang highlighted Korea’s yearslong efforts to build a secure, reliable electronic tax administration, which grew large enough to amass big data and evolved to be used as a resource for an AI system aimed at detecting any attempts to dodge taxes.

In particular, he addressed an AI-driven scientific approach to pinpoint targets for tax audits and verify whether they filed taxes accurately and legally.

In the case of targets mistakenly or unintentionally missing tax payments, the system is aimed at providing errors they made and inducing them to pay up voluntarily.

In addition, the system is efficient in terms of labor and costs, and the NTS does not need to dispatch its officers to suspected scenes of tax evasion.

“As the commissioner gave a corresponding presentation, officials from countries, such as Chile and Azerbaijan, showed great interest,” the NTS said. “A heated Q&A session continued even after the scheduled meeting time, concerning the introduction of the AI-driven tax administrative system.”

On the sidelines of the CIAT general assembly, Kang met with Korean business representatives and immigrants in Chile to learn about the difficulties they face concerning local tax policy.

In return, he relayed those concerns during a bilateral meeting with Javier Etcheberry, acting director of the Chilean Internal Revenue Service, and requested interest and support for those Koreans affected.

Furthermore, Kang held a series of bilateral meetings with tax commissioners from Brazil, Spain and several other countries.

He proposed close cooperation to swiftly resolve double taxation issues through mutual agreement procedures under tax treaties, and to facilitate the automatic exchange of tax information, including financial data.

The NTS said it will continue to solidify cooperative networks not only with CIAT but also with multilateral organizations, including the OECD and the Intra-European Organisation of Tax Administrations.