The Role Of Technology In Optimizing The Tax System In The Digital Age

Abstract

In the digital age, the integration of advanced technologies into tax systems has revolutionized tax administration, enhancing efficiency, transparency, and taxpayer compliance. This study conducts a comprehensive literature review to explore how digital tools such as artificial intelligence (AI), blockchain, big data analytics, and e-filing platforms are reshaping tax collection and management across various jurisdictions. The findings reveal that automation reduces manual errors and processing time, while AI and machine learning enable predictive compliance monitoring and fraud detection. Blockchain introduces secure, immutable records that bolster trust and cross-border coordination. Moreover, digital platforms improve taxpayer experience through real-time services and personalized assistance.Despite these advancements, challenges persist, particularly in emerging economies, where infrastructure gaps and regulatory limitations hinder full adoption. The literature emphasizes the need for strategic planning, capacity building, and tailored support for small and medium enterprises (SMEs) to ensure inclusive digital transformation. This review contributes to the discourse on Tax Administration 3.0, highlighting the pivotal role of technology in modernizing fiscal systems and promoting sustainable governance.