Increased Technological Resources for Hesse's Financial Departments - Enhanced tech for Hessen's financial departments.
Finance Ministry in Hesse to Increase Use of Technology for Tax Processing
Hesse residents received their income tax notices a week earlier than the previous year, attributable to the ongoing digital transformation. Finance Minister Alexander Lorz (CDU) announced at the annual report of the Upper Finance Authority in Frankfurt that artificial intelligence (AI) will be increasingly incorporated in this process.
Currently, a research center for AI has been operational in the tax office in Kassel since 2019. According to Lorz, the center has been significantly expanded, and the staff now comprises 40 employees, with more to follow. AI is being utilized in the evaluation of extensive datasets such as the Panama Papers.
Furthermore, half of all property tax notices are now generated automatically, stated Lorz. AI is expected to be utilized in cases of Cum-Cum suspicion (dividend stripping) in the future. Since 2024, there has also been an innovation hub for digital testing techniques at the tax office in Gelnhausen.
The accelerating digitalization has had a positive impact on citizens, says Upper Finance President Konstanze Bepperling. On average, income tax returns were processed within 44 days last year, seven days faster than the previous year, setting a new record.
84 percent of income tax returns in Hesse are now submitted digitally via the Elster portal. Approximately a quarter of tax returns from employees are processed automatically and, consequently, faster.
Regarding staffing, there is good news. All 3,800 positions in the tax administration were filled in 2024, a feat not achieved in decades, according to Bepperling. This growth can be attributed to the relocation of many positions to the region.
In 2024, tax investigators and auditors in Hesse generated additional income of 1.6 billion euros, as per the annual report. The Upper Finance Authority, situated in Frankfurt, functions as the intermediary authority of the Hessian tax administration, located between the tax offices and the Ministry of Finance.
While the search results do not provide specific information about the implementation of AI in Hesse's financial offices for tax purposes, particularly in cases of Cum-Cum suspicion or property tax notices, they do highlight broader trends and applications of AI in tax administration and financial compliance. Machine learning models can aid in fraud detection, while AI can also automate routine tasks like tax filing and classification, thereby reducing administrative burdens. AI is employed by local governments across the world for various applications, and projects like URBAN.AI involve collaborations with local universities to develop AI solutions for municipal challenges. The exact manner in which AI is being used in Hesse's financial offices for these specific purposes can be better understood through local government resources or official announcements from Hesse's financial authorities.
The Finance Minister in Hesse plans to use artificial intelligence (AI) more extensively in the tax processing process, as seen in the operation of an AI research center in Kassel since 2019. AI is expected to be utilized not only in the evaluation of extensive datasets like the Panama Papers but also in cases of Cum-Cum suspicion and the generation of property tax notices.
In line with the increasing use of technology in finance, the tax office in Gelnhausen has an innovation hub for digital testing techniques. This accelerating digitalization not only facilitates faster tax return processing but also reduces the administrative burden through AI-enabled automation of tasks like tax filing and classification.
