Tax and Technology

S. 535Explainable AI: Taxpayers’ Rights and System of Checks and Balances

Cristina Cacais Rio de Oliveira Araújo

S. 5361. Introduction

Artificial Intelligence has become increasingly prevalent in various aspects of modern society, including the public sector. Tax administrations, for instance, have been adopting AI systems for different purposes, such as taxpayer profiling, fraud detention and risk assessment (Serrano Antón, 2021). However, the use of AI in such critical areas raises concerns about accountability, transparency and fairness. This is where Explainable AI (XAI) comes in.

Even though there is no universal definition of Artificial Intelligence, a broad concept could be adopted. In this sense, AI is a computer system that responds to its environment whilst potentially being able to save money for governments and taxpayers. However, there are risks associated with it, such as biased decisions and lack of transparency.

XAI is a new field that aims to create AI systems that can provide human-understandable explanations for their decisions and allow decisions to be contested. It is different from Transparent AI, which, despite not hiding the computation behind its decisions, may not be able ...