Taxation, Leo: tackling tax evasion with artificial intelligence, without relying on automation. The Tax Code is on its way

The use of artificial intelligence in the fight against tax evasion, whilst respecting privacy and, above all, without ever replacing human judgement. Recovery of evaded tax totalling 101 billion over the three-year period 2023–2025. The Tax Code is due to be submitted to the Council of Ministers by October. The tax authorities and Sogei are working on a simplified enquiry system – that is, a database that will enable individual taxpayers to receive answers based on previous cases without having to go through the formal enquiry process. Further simplification is on the horizon ahead of the introduction of the Consolidated Laws from 2027, with a type of software that enables immediate translation to understand what the old rules were based on cross-reference tables, thereby avoiding misunderstandings such as the recent social security contribution controversy regarding severance pay (TFR), on which there will be no change in taxation. The path towards simplification may lead to a reduction in the amount of information required on tax returns. These are some of the points raised by the Deputy Minister for the Economy, Maurizio Leo, during a hearing before the bicameral supervisory committee on the Tax Register, chaired by Maurizio Casasco (Forza Italia).

The aim of the tax reform is to make greater use of artificial intelligence, but “it will never replace humans” and the right to be heard will be upheld; in any case, the use of new technologies will take place whilst respecting “privacy”, explained Leo. “As part of the tax reform, we are placing particular emphasis on technology, artificial intelligence and the interoperability of databases, with the aim of utilising artificial intelligence through the interoperability of databases,” he pointed out, “and then, by simplifying the system, to give greater prominence to and boost the exchange of information. All of this, however, will be carried out in compliance with privacy regulations as established at both national and European level.”

Leo explained that the use of information technology makes it possible to speed up the ‘response time on the part of the tax authorities’, but there is always ‘human oversight’: ‘which is why, as we speak, we are working on the best way to accelerate progress in terms of IT expertise, whilst not depriving the tax authorities of subsequent oversight’. ‘In any case,’ Leo emphasised, ‘even if we make use of these computerised procedures, technologies and so on, human involvement will always be essential: there will be no fully automated processes. Some might say that assessments will be carried out on the basis of artificial intelligence: no, there will be no fully automated processes; there will always be human intervention. A cross-examination will take place, and a human will have to verify whether the IT procedures supporting the assessment process are consistent.”

“The trend in tax evasion recovery – thanks in part to technological innovation – shows that in 2023 we recovered 31.4 billion euros, in 2024 33.4 billion, and in 2025 36.1 billion: therefore, over the three-year period 2023–25, we have recovered – thanks in part to the use of these tools – 101 billion, an all-time record. Since the start of this parliamentary term, the results have been very, very significant,” Leo pointed out in reference to the recent past. The use of technology in the fight against tax evasion, the Deputy Minister noted, takes place ‘through the full utilisation of data flowing into the tax system, the enhancement of risk analysis, and the use of digital technologies and artificial intelligence solutions’. This, he added, has led to “significant results” in the fight against tax evasion.

“The culmination of the tax reform will be the tax code we are currently working on, and I believe that by October we will be in a position to present it to the Council of Ministers.” The Deputy Minister added that ‘this will complete the picture’ of the tax reform, Leo explained, noting that the process had been completed with the adoption, by the 29 August deadline, of 29 legislative decrees, comprising 17 legislative decrees, 4 amending decrees and 8 consolidated texts. Over the next two years, he noted, it will be possible to introduce corrective measures.