The growing complexity of tax regulations and the expanding volume of data have made traditional tax processes increasingly inadequate to address modern demands, even as artificial intelligence (AI) becomes globally integrated. Existing studies demonstrate that AI holds significant potential to enhance tax compliance, improve the accuracy of assessments, and streamline administrative functions. This chapter examines the integration of artificial intelligence (AI) and taxation, highlighting the transformative potential of AI technologies in enhancing tax administration and compliance. This chapter discusses how AI can be leveraged to streamline tax compliance, improve accuracy in tax assessments, and enhance fraud detection. This chapter adopts a conceptual methodological approach, featuring an extensive literature review of relevant studies on artificial intelligence (AI) and taxation. By analyzing current applications of AI in global tax systems, the chapter highlights the advantages of automation, predictive analytics, and machine learning in alleviating the administrative burden on both tax authorities and taxpayers. Additionally, it examines the challenges and ethical considerations related to AI implementation in tax practices, including data privacy and security, the risk of algorithmic bias, and the absence of regulatory frameworks governing AI usage in tax systems. Many tax authorities also encounter resistance to change, limited technological infrastructure, and a shortage of skilled personnel necessary for effectively utilizing AI tools. Therefore, there is an urgent need to explore effective strategies for integrating AI into taxation practices while addressing these challenges to promote a fair, efficient, and transparent tax system. This chapter concludes that the adoption of artificial intelligence (AI) in taxation will enhance efficiency while fostering greater transparency and trust in the tax system. This chapter seeks to contribute to the ongoing discourse regarding the significance of AI in tax processes, offering stakeholders a clearer understanding to proactively embrace these changes.