Assessing the Role of Artificial Intelligence (AI) on Tax Fraud Detection

Artificial Intelligence (AI) technology is emerging to aid in revolutionizing various aspects of our lives, mainly improving our day-to-day practices and enhancing efficiency and productivity. AI-backed technologies are also being implemented across multiple government agencies to assist them in streamlining the way they administer their functions, and this is a critical area in which AI has been making a significant inroad compared to the reliance on traditional methods of detecting tax fraud and classifying organizations and assessing their risk in tax fraud. The implementation of AI in tax fraud detection has the potential to revolutionize the process for tax administrators and government agencies, as well as the possibility to perform risk assessments and classify organizations based on the risk level they are at in terms of tax fraud likelihood (Attayah and AlShater in Int J Digit Acc Res 21:95–129, 2021 [4]). However, AI is a solution and faces several challenges that could prevent the technology's effectiveness. Bahrain is at a stage of transforming its government delivery systems with AI technologies at the core of its strategies. Hence, analyzing different case studies about the effect of AI-based tax fraud detection systems can offer a guide to Bahrain tax administration agencies.