Research

AI in Tax Administration (OECD, 2025)

What the report says

The report surveys the state of play across core government functions and then examines tax administration as one of them. Its subject is administrations adopting AI to do their own work, from triaging risk and detecting anomalies to supporting taxpayers and drafting internal analysis. It documents where these uses are already live, where they are still experimental, and what tends to separate the two.

Alongside the survey, the OECD sets out and tests a way of thinking about responsible AI use in the public sector. The emphasis is on governance: transparency about where automated systems are used, human oversight of consequential decisions, fairness toward taxpayers, and accountability when a system gets something wrong. The report treats these not as optional extras but as the conditions under which an administration can deploy AI at all without eroding trust.

One distinction is worth holding onto. The report is about AI as an instrument in the hands of the administration. It is not about taxing the transactions that autonomous agents might one day carry out. Those are different questions, and this entry cites the report only for the former.

Why it matters for real-time taxation

Real-time taxation and administrative AI point in the same direction: both move the administration from reacting to filed returns toward acting on live signals. The value of this report is that it describes the discipline that has to come with that shift. If assurance is going to arrive continuously, then the systems producing it need to be governable, explainable, and subject to human oversight, exactly the properties the OECD argues for.

It also frames the horizon responsibly. As commerce increasingly involves software acting on a mandate, the question of how tax attaches to those transactions becomes real. This report is the context for that conversation, and it is why we describe agent-bound transactions as a horizon to design for carefully rather than a capability that exists today.

Who wrote it

The report was produced by the OECD and issued by OECD Publishing in Paris.

Citation

• Title: Governing with Artificial Intelligence: The State of Play and Way Forward in Core Government Functions (chapter: AI in tax administration)
• Publisher: OECD (OECD Publishing, Paris)
• Year: 2025 (published 18 September 2025)
• Link: https://www.oecd.org/en/publications/governing-with-artificial-intelligence_795de142-en.html

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