Speaking at the Vietnam CEO Summit 2019, titled “Leading Strategy in Digital Transformation and Opportunities for Vietnamese Businesses”, Mr. Jeffrey Saviano, EY Global Tax Innovation Leader and MIT Connection Science Fellow said that Artificial Intelligence (AI) and Blockchain are very important to build a global tax system.
Value-added from Blockchain-based business operation will increase to about USD 176 billion by 2025 and will then skyrocket to USD 3.1 trillion by 2030. However, only 4% of CIOs are actively using AI within their own organization currently. Meanwhile 42% of CIOs are deploying AI development projects.
Mr. Saviano also quoted the report from McKinsey & Company and Gartner, which state that the technology giant such as Baidu and Google have paid USD 20 billion to 30 billion for AI in 2016. By 2021, 40% of new business applications will be equipped with AI technologies. From now to 2030, AI will generate 13 trillion USD of GDP growth (equivalent to 1.2% per year).
US-based companies have made 66% of all investments in AI in 2016. China ranks second with 17%, but is growing very fast. Global business value derived from AI is expected to reach USD 1.2 trillion in 2018 and USD 3.9 trillion in 2022. Cash flow can be reduced by 20% compared to the current if AI technologies are not applied.
Also according to Mr. Saviano, in this year, they built a model of Global Tax System, a kernel of the AI-Government. This will be a pioneering initiative in applying advanced technologies to the most pressing tax issues in the world. Tax digitization trend and shifting focus from tax returns to tax payment by data will become clear. This tax digitization procedure model will extract data directly from source systems and send such data directly to the government. Moreover, the cycle time of this model can be shortened from 3 years to 90 days.
With AI and Blockchain applications, businesses will be able not to declare tax as the usual process. Instead, businesses will take their own data to calculate tax with assistance of AI and then submit directly to the government; the tax authorities only consider whether the enterprise paying such taxes is appropriate. When tax administration will be digitalized at a deeper level, the government must also make it possible to facilitate their own institutions.
Advanced technology capabilities for tax in the coming time will include Document Intelligence (DI), Structured Machine Learning (ML), and Blockchain for supply chain. With AI solutions, time on task has been reduced by 50-70%, accuracy is greatly improved, tax professionals’ satisfaction is much higher and key tax data can be extracted in hours rather than days.
Tax policies and tax management are important to every government. Tax solutions with advanced technologies and the explosion of Blockchain technology with specific applications into business operations have attracted the attention of businesses at the CEO Summit. Most businesses are wondering about which scope to apply Blockchain, how to create value, where to start, and how to do it.
Together with interested parties, such as the World Bank, Boston Global Forum & Michael Dukakis Institute for Leadership and Innovation and MIT Connection Science develop cutting-edge advanced technology based solutions for the benefit of government tax authorities (focused on AI and Blockchain) that will also greatly benefit the private sector. It will open a potential application trend for many areas such as banking and finance, retail, transporting goods, manufacturing, telecommunications, etc. With prioritised policies focusing on developing IT to a key sector, Vietnam is expected to be where Blockchain technology has many good conditions for development. This is also considered as an opportunity for start-up businesses and individuals to apply this new to be able to reach out to the region and the world.