South Korea’s National Tax Service (NTS) has announced plans to introduce generative AI trained on laws, precedents, and rulings to provide customized tax consultations. The agency has outlined enhancements to its digital tax services, including the deployment of generative AI for flexibility in auditing processes.
The country’s National Tax Administration Reform Committee held a meeting today at the Seoul Regional Tax Office to discuss the current status and plans for future innovation projects. One of the main items on the agenda was the launch of AI tax consultants, which the committee says will provide taxpayers with information guided by case law, tax laws, and regulations. The National Tax Administration Reform Committee is the advisory body to the NTS.
The latest reforms build on top of 2024’s declaration of the ‘first year of AI Tax Administration,’ including AI voice consultations. Commissioner Lim Kwang-hyun discussed the future innovation plans at the meeting with the National Tax Administration Reform Committee at the Seoul Regional National Tax Service in Jongno-gu.
NTS AI tax consultant provides customized guidance
An exclusive report by The Chosun Daily stated that the NTS has proposed introducing a generative AI tax consultant to provide tailored guidance. The tax agency aims to enhance the quality and accessibility of consultation for honest taxpayers.
South Korea’s tax committee has addressed audit practices under the proposal, with a framework that allows taxpayers to choose the scheduling of regular tax audits. The new proposal aims to limit on-site audits, where officials are stationed at business premises during standard examinations. It also aims to reduce operational disruptions.
Korea’s National Tax Service proposed raising sales thresholds for access to observer services from a taxpayer protection officer to improve taxpayer rights. So far, individual business owners are restricted to annual sales of 1 billion Won ($676,229) or less, while corporations are restricted to 2 billion Korean Won ($1,352,457) or less. The expanded eligibility means more entities would be able to have an impartial NTS ombudsman present during audits.
The new proposals align with Korea’s NTS’s ongoing transformation since the 2024 declaration of the ‘first year of AI Tax Administration’. The NTS announced a full-scale initiative towards AI applications in 2024, starting with tax consultations and allocating KRW 30 billion ($20,286,861) over two years to support the initial stages of the program.
NTS’s AI tax consultant to cut across filing and payment processes
Korea’s NTS launched an AI tax consultation service using voice recognition technology in May 2024, marking the first implementation of AI in government agencies. The AI model was trained using over 2 million records from previous tax consultations. The AI tax system will cut across filing, payment, and other processes.
An upgraded AI home tax system was also included in the proposal, with funding spanning from 2024 through 2026. The platform’s design features a user-friendly interface, targeting citizens with little to no technical knowledge. It will also incorporate more tax processes for enhanced consultation.
The government of South Korea attempted a similar pilot service in 2023. Deloitte noted that the initiative increased the call success rate from 24% to 98%.
Meanwhile, NTS officials stated that the 2025 proposal will further improve their initial plan by integrating more customized interactions. The new AI-driven tax consultant model is expected to provide more accurate responses.
The proposed tax consultation reforms align with the country’s focus on innovating digital tax systems, prioritizing convenience and fairness. Flexible timing and reduced physical presence will address feedback from small and medium-sized businesses.
The current initiatives show that the agency is committed to innovation and an administration centered on taxpayers. The initiatives also build on proven improvements in user experience.
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