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In the first episode of the podcast on Generative AI (GenAI) and its transformative potential in the world of tax, Rahul Patni, Digital Tax Leader, EY India and Divyesh Lapsiwala, Partner, Indirect tax, EY India breaks down the difference between GenAI and earlier technologies, highlighting its ability to democratize tech knowledge and simplify complex tasks. He also shares real-world use cases, such as data analysis and legal research, where GenAI can enhance productivity and work quality. Rahul also underscores the significance of human involvement, as GenAI is currently assisting with tasks that are either routine, repetitive or time-consuming. Join as we explore the evolving roles of tax professionals in a GenAI-driven future.
With prompt engineering, GenAI enables tax professionals to perform complex tasks in a simple and effective manner.
GenAI has the ability to significantly enhance productivity and accuracy in data analysis, legal research, and litigation processes in tax.
While GenAI can be a co-pilot or digital assistant for tax professionals, human oversight remains crucial for validation and decision-making in tax applications.
GenAI can prove to be a powerful tool for tax professionals, helping them automate tedious tasks and empowering them to focus on strategic decisions.
For your convenience, a full text transcript of this podcast is available on the link below:
Divyesh: Hello, everybody. I am Divyesh Lapsiwala, Partner, Indirect tax, EY India It is my pleasure to host you today. EY is launching a series of podcasts on the buzzword today, Generative AI, and as a Tax Partner, we want to focus on what does it mean for tax. We all know the amount of traction Generative AI is building today. We all know that there are a lot of conversations about Large Language Models (LLMs) of a transformational impact that this technology can bring to our lives. Yes, we read about many use cases as they are called in practical daily life, but are they also meaningful for tax? We have to unravel that, and that is the reason why we are here today.
Divyesh: So, in the first series I am going to talk with our Digital Tax Leader, Rahul, who also has been focusing on Generative AI for the last one year, and he loves this topic. So great to have you here, Rahul.
Rahul: Thanks, Devyesh. Absolutely fun and looking forward to spending time on this webcast, and thanks to all the listeners and viewers for joining. Lovely!
Divyesh: So, what we want to do today is let us peel the onion. Let us understand how Generative AI can be connected to tax. What is really the hype? What is the mystery and what is the future looking like? Yes, we are all stargazing today but that is the way the technology works. So, let us begin first by understanding where we are and Rahul that opens my first question to you. Please tell me how Generative AI in very simple terms is different from all the software and technology that we have been traditionally using.
Rahul: So, the Generative AI is actually fundamentally different from everything else that we have seen in technology, particularly in tax. What we all have seen and use so far is very complex coding, complex forms. Often tax professionals do not understand what is going on behind the scenes, and they almost every time need a tech professional or an IT professional to come in and help. Now comes Gen AI, it is actually reversing this. It is democratizing knowledge of technology and coding. So far we used to say, we used to tell our younger professionals, kids that learn coding it will help you in life, right? But, with Gen AI it is actually the reverse. All you need to know and master generative AI is common sense in English. That is it. With that, you can be a great prompt engineer and get excellent outcomes for you.
Divyesh: That is fantastic. Rahul. Thanks. I think that is a good opener for us. So now that you have created this excitement for us. Tell me, really, what are the use cases that you are working on?
Rahul: Okay, so this is the most fun part, the best, tax AI or AI in tax. I mean, when people ask me what the use cases are, my simple answer is, whenever there is human, there is a use case where it is really simple. You do not have to think beyond that. You have to just apply in lens that, are you doing something which you do not like and then think whether I can do it for you, right. So, so let us talk a little bit specific. Now ask tax professionals what we do. Broadly, we do three things — we deal with data clients or whether it is our internal functions. They give us data. We advise whether it is advising clients or advising our internal stakeholders. We advise and then lastly we defend our positions. So, it is litigation and you take each of these three areas. There are many, many use cases which I can help, and make lives of people better or improve productivity and most importantly, improve quality of the work. That is the part which I think is a lot more exciting than everything else and it is improving work quality.
Let me give you an example around data. You know as accountants, as tax professionals, we deal with general ledgers, we deal with loaded Excel sheets and we are often asked to review these, find out exceptions. Now we have worked on use cases where you can straight away go and ask a question to an excel sheet to tell that if this attribute is present, or if this line item is present, or is this non-deductible or non-creditable item is present. It is just absolutely amazing how this speed and accuracy with which this job can be done. So far this whole concept of, you know, test checking or just doing simple sampling, I think that can just completely go away. You bring in AI and you can do 100% validation of data, invoices, agreements. You know, sometimes there comes in box files Right. but how do you deal all of that? I can, can do that, like, literally matter of minutes and much better than what, what a human would do. So that is AI for you.
Divyesh: Oh, that is really nice. But you gave us a good example for data. And I think as a tax professional, I can really relate to that problem. Help me understand a little bit more about the other two pieces you spoke about, which is research and litigate.
Rahul: Right. So, this gets even more interesting. This is actually, for the first time, we have been handed over a tool or a toy. I do not know which one yet but, it can really start behaving and thinking like a tax professional for some. I mean, for the very first time, something which has cognitive abilities to think like an accountant or a lawyer. So, it is up to us how we use it again. I mean, if you are to look at a few examples, let us say you are given a 500-page agreement for review. You have to look for tax clauses. You have to look for things which may have an impact from a commercial standpoint or a tax standpoint. A traditional way would have been to take up and go through or do a control F and things like that. but you can never be sure about those ways of working, right, unless you put days and days into it.
Divyesh: My fears.
Rahul: Absolutely. So, this whole data discovery or the discovery part, which is integral to any research that you do, I can help, coming to, reading orders, code orders. You know, you are doing research. You have 50 judgments to refer to. Now, AI can simply go through 50 judgments and really tell you that, hey, I think the fact that you are looking for the legal principle that you are looking for are present only in this five out of 50. Oh, so you do not have to really go through 50 judgments now, but really focus your efforts on doing high quality research only on these five items. So, all of these are very, very exciting ways of how you can use AI, whether in research or in defending litigation type of things.
Divyesh: That is fascinating, fascinating. But then, I mean, one one thing that worries me is that are we understanding it well or are we not understanding it? Well, in terms of the capability and the power, I mean, are we building misconceptions around it? and what is your view on that?
Rahul: Well, I think it is a great point. While there is immense promise, there is immense potential. But we must understand that this is still an insane technology, and especially in field like tax or interpretation of law or dealing with numbers especially, which have to be filed with tax authorities, right. You have to have human in the loop. I do not think, we are at a point where we can simply rely on machine generated outcomes and go ahead and submit. We have to almost treat this as a copilot or a digital assistant, which can do a lot of things for you, which you do not like or you wish you had a magic wand. But at the end of the day, you need a human in loop. who can come in and, really validate what is happening and then take on from there, take the final decision and make the filing or make that judgment call. So, to that extent, yeah, I mean, it is a great assistant, and a great pilot, or a copilot, but not an auto pilot. Let us not mistake this to be an auto pilot. I think that is a very important point to make. The human in the loop.
Divyesh: I love that phrase. Human in the loop. Tell me more about this. Does it mean my job is secure? And on a more serious note, how do you see the role of individuals or professionals evolving along with this technology? Rahul: Yeah, so long term view is very hard to predict for anyone where we will be in seven, eight, ten years from now. I think the other thing which will really shape the agenda of professionals and tax professionals in specific will be government policy. I think, and as we know, especially in India, government is really in a digital overdrive. They have done some fantastic projects in outcomes with the use of technology and, it and it is very, very likely that government will use advanced AI, such as generative AI and many of the things in their ways of working. So, to come back to the point, it is going to be two things. How technology evolves and how fast it evolves and second, the policy side of it. How government adapts some of these things and in turn force taxpayers also to adapt it.
Having said that, some things I think will happen for sure very soon. I think, all of us will carry digital assistance some sort of tax assistance with us. When we talk about budgeting, when we will talk about manpower planning in future, we will be talking of both human assistance, human, manpower as well as digital manpower. Divyesh: Interesting.
Rahul: This is how it is going to shape in, in in my view. Imagine if there is a court hearing which is going on, or your sitting before, you are not already arguing your case, and you have a digital assistant going on your iPad or on a phone which is listening live. What is happening and just telling you, okay, who? You can do this. Take this argument, rely on this case might be some of the resource, some of the newer models which were launched just very, very recently in their capability to listen, live and give inputs live. Is this taking it to the next level? Imagine you can connect that technology with tax knowledge and so on the fly. You can do many things. so yeah, I think the future is, is a bit unknown but, certainly very exciting and to your point where the jobs are secure. Well, I think the place in time where we are in India, I do not think we need to worry about jobs. The only thing I would say is, I will not take jobs away. but we have to be careful about people who know I.
Divyesh: I like that. So you seem to be just very, very excited and, you know, gung ho about this. So, what is your summary view on generative AI?
Rahul: Well, what really excites me, on generative AI is what it can do to transform people's lives. Specifically, when I talk to professionals, if you see, one common problem everyone has is time. You know, eight out of ten people, whether it is in consulting in industry clients across when I talk to them, they say we have too many things going on. We just do not have time. AI is this almost a magic wand which has been handed over to us? it can really solve a lot of your day to day issues. Your team's problems. If when, if you spend time you take effort to understand it. Make sure your teams are also understanding and you are adapting it fast. So one big change to my mind it can bring and it can be really a blessing is just make your lives better. So, let us hope that it all turns out to be what we want and, we can have the same conversation ten years from now and both of us are around.
Divyesh: Lovely, Lovely. So, thank you all for being with us. I think this was a good fireside chat. I have learned a lot today. I have learned, most importantly, that it is a co-pilot and not an auto-pilot. but I think if you look at it deep down, this is transformational. In my 20 years of work, I have seen many tax changes. I have seen many process changes, but I have personally not seen anything as tectonic as this. This is here to stay. It is going to impact. But as I told us, it is an enabler. And therefore, how do we use our digital assistants in the future? How do we transform our lives? How do we make ourselves more efficient, our teams more efficient, our processes more efficient, our organization more efficient? And how do we start using its predictive capability? Is an exciting part for all of us. So the takeaway is very clear. Get generative AI ready for yourself. Thank you for being with us. This is the first podcast you will hear a lot more from us and so please hang on and stay connected to us. Thank you.
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