Can the Integration of AI Technologies Help Curb Tax Evasion While Fostering Greater Digital Awareness Among Business Entities?

Abstract

Imran Hussain Shah

This study investigates the influence of artificial intelligence (AI) adoption on tax evasion and digital awareness among business entities across Europe. As tax authorities and firms increasingly implement intelligent technologies, AI's potential to improve compliance and transparency has gained significant attention. Using a quantitative research design and multiple regression analysis, this study examines whether AI-enabled systems—such as automated accounting, audit analytics, and digital tax platforms— can reduce tax evasion while enhancing digital awareness. Survey data were collected from 120 SMEs across various European Union member states. The results reveal a strong negative correlation between AI adoption and tax evasion, and a positive relationship with digital awareness. These findings highlight the strategic value of AI in promoting fiscal responsibility and advancing digital maturity across Europe’s corporate landscape.

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