In Vietnam’s national digital transformation, Artificial Intelligence (AI) is increasingly being applied across various sectors, from healthcare and education to public finance. A prominent direction is the integration of AI into tax management – especially for individual business households, which constitute a large proportion of the informal economy. However, this process not only brings clear benefits but also poses significant challenges, demanding synchronized preparation from multiple stakeholders.

Boosting Management Efficiency, Enhancing Business Transparency

AI offers substantial advantages in streamlining tax processes and fostering a more transparent business environment for business households.

• Automating Tax Management and Declaration Processes: AI can process vast amounts of data in a short time, automating many stages in tax declaration, payment, and management. For business households, this means no more manual record-keeping. They can use software to track revenue, automatically calculate taxes, and receive reminders for submission deadlines. This saves time and costs, reduces errors, and significantly enhances legal compliance.

• Proactive Detection of Fraud and Revenue Loss: AI supports the tax sector by analyzing data from multiple sources: e-invoices, Point-of-Sale (POS) systems, bank transactions, e-commerce platforms, and more. Machine learning algorithms can detect suspicious behaviors like abnormal revenue, under-declarations compared to actual data, or discrepancies among business households in the same industry. This enables tax authorities to conduct targeted inspections, avoiding inconvenience for compliant households.

• Increasing Transparency and Credibility for Business Households: When data is transparent and business operations are digitized, well-compliant business households will receive higher credibility ratings within the system. This facilitates access to credit, participation in e-commerce, and support from the State. In the long run, this lays the foundation for business households to achieve sustainable and more professional development.

The Technology Gap and Hesitancy from Business Owners

Despite the clear benefits, integrating AI into tax management faces considerable hurdles, particularly concerning technology adoption and psychological resistance from business households.

• Infrastructure Limitations and Access to Technology: Many small-scale business households, especially in rural areas or the informal sector, are still unfamiliar with using sales management software, e-invoices, or online tax declarations. The lack of equipment, internet infrastructure, and basic digital skills creates significant barriers when they attempt to access AI-integrated tax management systems.

• Fear of Surveillance and Loss of Privacy: Some business households worry that AI systems monitoring transaction data, cash flow, and revenue could lead to excessive tracking or erroneous processing. This hesitancy stems from:

  • Long-standing habits of “flexible declaration.”

  • Lack of clear information regarding data security mechanisms.

  • Concerns that automated systems might cause misunderstandings if there isn’t flexibility in processing. Without adequate communication, this could lead to negative reactions from individuals or attempts to circumvent the system rather than cooperate.

• Lack of Tax Knowledge and System Usage Skills: The majority of business households lack formal accounting-finance backgrounds and systematic digital skills. Interacting with AI-based tax management systems can make them feel confused about:

  • How to correctly declare information.

  • Understanding system alerts.

  • Correcting errors or updating information if there are changes in business operations. If there are no training programs, technical support, or user-friendly interface designs, AI could become a barrier instead of an assistant.

The Need for a Suitable Roadmap and Support Policies

For AI to be effective in tax management without overburdening taxpayers, the State needs a clear, step-by-step implementation roadmap tailored to the technological access levels of different target groups.

It’s crucial to strengthen communication efforts, raising awareness among business households about the benefits of transparency and digitalization in business operations. Additionally, support programs, digital skills training, guidance on using tax software, and simplified declaration processes will help individuals access the system more easily.

From the tax authorities’ perspective, it’s essential to ensure that AI systems operate transparently, protect information security, and establish clear feedback and complaint resolution mechanisms for any discrepancies during implementation.

Digital transformation in the tax sector with AI’s support is not just an inevitable trend but also an opportunity to create a more transparent and equitable business environment. However, to leverage technology effectively without increasing the burden on taxpayers, especially individual business households, policies tailored to each target group are necessary, along with close collaboration between regulatory bodies and the business community. When technology is combined with genuine support, AI will no longer be a barrier but a catalyst for sustainable and equitable development in the digital economy.

Vu Ho