Artificial intelligence raises taxes in Japan to record levels

Japan’s tax authorities say the amount of additional taxes levied on undeclared income has reached a record high of about 139.8 billion yen, or about $932 million, due to the use of AI technology.

The National Tax Service notes that in the year to June, the tax authorities of the region conducted more than 600,000 tax audits.

They found 311,264 cases of undeclared income and improper payment of income tax. The amount of undeclared income amounted to 996.4 billion yen, or about 6.64 billion dollars.

The amount of additional taxes amounted to 139.8 billion yen, or about 932 million dollars. That’s 3 billion yen, or about $20 million, more than the same period last year. This figure has become a record since the current method of compiling statistics was introduced in 2009.

By type of activity, the largest amount in each case was management consultants at ¥38.71 million, or about $258,000, followed by hostesses and bar owners at ¥36.54 million, or about $240,000, and online distribution content — 23.81 million. yen, or about $160,000.

One of the reasons why the amount of additional taxes reached a record level, the agency cited the full implementation of AI technologies last year.

The department says officials have offered AI to learn about cases of undeclared income so they can focus their audits on taxpayers who may not have properly reported their income. Taxpayers include those whose returns were found to have many deficiencies or whose declared amount was rounded off, or those in professions where a large proportion of income is paid in cash.