With Generative AI being the latest buzzword around the globe, business leaders in India are also hopeful of the transformative potential of GenAI. According to a latest report by PwC titled ‘27th Annual Global CEO Survey: India perspective’, Indian CEO’s are anticipating significant top and bottom-line benefits.
The report has put forth the impact of GenAI on taxation, saying that with the technology, managing tax compliances will become easier. It said that GenAI can help organisations track latest laws and regulations around taxation and help overcome the current time gap between regulatory requirements and readiness of an organisation to furnish large amounts of data.
Further, the report added that Gen AI can help companies in tax research with enhanced Large Language Models (LLMs). It can also serve as a smart assistant for the taxpayers by turning into a more personalised tax assistant, simplifying the complex data requirements and ensuring that the data is valid.
Growing interest in GenAI
The report revealed that 57 per cent of the surveyed Indian CEOs agree that GenAI has changed the manner in which their companies are creating, delivering and capturing value. 71 per cent CEOs expect GenAI to increase their employee efficiency this year, while 70 per cent believe it will improve their own performances, the report said.
Research firms have said that India’s Gen AI market is expected to grow at a CAGR of 48 per cent to reach $17 billion in 2030, up from $1.1 billion in 2023. Around 84 per cent of Indian CEOs are allocating capital to fund Gen AI projects to take an edge against their rivals.
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Impact of GenAI on economy
Analysts have also said that the cumulative impact of GenAI on India’s GDP may range from $1.2 trillion to $1.5 trillion by 2030, contributing an additional 0.9 per cent to 1.1 per cent in annual CAGR. The number of Generative AI startups in the country have more than doubled, from 25 in 2021 to 60 in May 2023, raising $590 million in funding as of May 2023.
In the face of the GenAI boom, companies are also faced with regulatory challenges, building trust among its users, and more significantly the ability to handle sensitive data. Governments across the world are pushing major digital changes such as faceless assessments, digital compliance and e-invoicing to enable a connected view of a taxpayer’s profile as well as holistic tax assessment.
Apprehensions about GenAI in tax
However, as with any new technology, there are concerns and fears about the conduct, limitations and privacy of GenAI. Many experts have warned that the tech is still under-developed and is more suited for non-tax, administrative work for now.
Various tax-professionals have flagged data privacy concerns that the LLMs may not provide a company with access over how its data and intellectual property is used. Moreover, the report stated that with tax being a subjective matter, it becomes important to fully understand the biases of GenAI, when the LLMs are provided with data.
And LLMs are known to provide inaccurate information sometimes. So, the reliability of the technology cannot be guaranteed.
What is the future roadmap for GenAI?
In a roadmap for the future of GenAI in tax assistance, the PwC report prescribed a few methods to overcome the current challenges. It said that organisations must build a well- defined GenAI strategy, where they clearly define the roles and responsibilities of the implementation of this technology. Further, it said that companies must strictly adhere to regulatory compliances as well as anticipate future compliance to stay ahead of the curve.
