Digitalization, Artificial Intelligence, and Tax Compliance: The Case of Estonia

Abstract

This study aimed to examine the impact of digitalization and artificial intelligence technologies on tax compliance through the example of Estonia. Estonia presented a pioneering model in tax administration with instruments such as electronic government, artificial intelligence-supported tax audits, the X-road data exchange system, and the electronic tax platform. The study employed descriptive analysis to evaluate the effects of digital and artificial intelligence-based tax practices on tax compliance. The findings showed that digital and artificial intelligence-supported systems in Estonia reduced the shadow economy, increased tax collection, and strengthened taxpayers’ compliance behavior. The study highlighted the potential of digitalization to improve tax compliance and offered several policy recommendations for countries transitioning to digital tax systems.

Keywords

• Artificial Intelligence
• Tax Compliance
• Digital Tax Systems
• Estonia

References

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