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At a high-level international gathering of tax authorities in Santiago, Chile, South Korea made a bold statement on the future of tax enforcement: artificial intelligence is now central to its campaign against tax evasion.
During the 59th General Assembly of the Inter-American Center of Tax Administrations (CIAT), Korea’s National Tax Service (NTS) Commissioner Kang Min-su showcased his agency’s pioneering use of AI to enhance tax compliance, boost efficiency, and prevent fraud.
Held from May 6 to May 8, the CIAT summit brought together senior officials from more than 40 member states, predominantly from Latin America, including representatives from the United States, Canada, Europe, Africa, and Asia. Kang was invited as a special guest speaker, marking Korea’s growing role in global tax policy discussions.
AI as a Game-Changer in Tax Administration
In his address, Kang highlighted Korea’s long-standing investment in a secure and fully digitized tax administration system, an infrastructure that now serves as the foundation for advanced data analytics and AI deployment.
“At the core of this transformation is our ability to collect, process, and analyze big data with artificial intelligence,” Kang said. “This has enabled us to develop a scientific approach to detect irregularities in tax filings and identify potential audit targets more accurately than ever before.”
The AI-powered system not only flags suspicious activity but also provides diagnostic feedback to taxpayers. If a taxpayer has unintentionally under-reported income or made filing errors, the system identifies the issue and prompts the individual or business to make corrections voluntarily. This mechanism fosters a compliance-first culture, reducing the need for costly investigations or audits.
Notably, the AI-driven approach allows the NTS to minimize physical inspections and reduce the burden on enforcement personnel. It significantly cuts administrative costs and labor, improving the speed and effectiveness of tax oversight.
Global Interest in Korea’s Model
Commissioner Kang’s presentation sparked keen interest among attendees. Representatives from countries such as Chile and Azerbaijan engaged in an extended question-and-answer session, pushing well beyond the scheduled time.
“The interest was overwhelming,” an NTS official said. “Many countries are grappling with similar issues, under-reporting, tax fraud, and lack of real-time visibility into transactions. Korea’s use of AI provides a possible roadmap for addressing these challenges.”
Korea’s model offers a compelling case for how governments can balance enforcement with fairness, using AI not simply as a punitive tool but as a means of increasing transparency, encouraging voluntary compliance, and reducing human error in tax administration.
Bilateral Engagements and Expat Outreach
On the sidelines of the conference, Commissioner Kang met with Korean business leaders and immigrant communities in Chile to listen to their experiences navigating local tax systems. In follow-up discussions with Javier Etcheberry, Acting Director of Chile’s Internal Revenue Service, Kang relayed the concerns of these Koreans and urged enhanced support for expatriates and businesses.
Kang also held bilateral meetings with tax authorities from Brazil, Spain, and other countries, emphasizing the importance of:
- Swift resolution of double taxation issues through mutual agreement procedures under existing treaties,
- Enhanced automatic exchange of tax and financial information, particularly to counter illicit financial flows and profit shifting.
These engagements are part of Korea’s broader strategy to deepen cooperation with CIAT and other international tax bodies, including the OECD and the Intra-European Organisation of Tax Administrations.
A New Era of Smart Tax Governance
Korea’s initiative underscores the broader global shift toward digital transformation in public finance. As tax evasion becomes increasingly sophisticated, often crossing borders and exploiting digital platforms, governments are racing to upgrade their tools and frameworks.
AI, in this context, offers more than just improved enforcement. It enables predictive modeling, risk assessment, and behavioral insights, which can inform better tax policy design. Korea’s successful embedding of AI into its tax system could provide a template for developing nations and advanced economies.
“The ultimate goal,” Kang concluded, “is not just catching evaders, but building a trusted, transparent, and efficient tax system that benefits both the government and the people it serves.”
About CIAT
The Inter-American Center of Tax Administrations (CIAT) is a multilateral organization focused on fostering cooperation, knowledge exchange, and modernization of tax administration among its 40 member states, most of which are in Latin America and the Caribbean.
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