The emergence of agentic AI has huge implications for tax functions, say Stuart Tait and Christoph Steiner.
Three years on from the launch of ChatGPT, the adoption of generative AI by tax functions is progressing apace. At a recent client event, we asked tax leaders how often their teams are using gen AI tools. Around half said they do so on a weekly basis; roughly a third access them daily.
This is encouraging. But just as tax leaders are getting to grips with this revolutionary technology, its next iteration has landed. Agentic AI is here.
‘Agentic’ simply means ‘having agency’. Agentic systems go further than answering queries and performing one-off tasks. They can autonomously achieve goals given to them by users by connecting existing AI tools.
While Gen AI responds to successive prompts to complete tasks, agentic AI orchestrates the work from start to finish, planning and executing assignments with little human intervention.
Agentic AI is therefore a step up from ‘traditional’ gen AI: it operates at a higher level. It is more suited to complex, uncertain tasks in tax. It’s a step toward intelligent automation and strategic enablement. Think of Gen AI as an intern: you need to spell out the steps needed to get to the desired outcome. Agentic AI acts more like a digital senior consultant. Set the end-goal, and it will go off and make it happen.
Some human oversight is still needed – usually at the beginning and end of the process – but far less than with gen AI. Precise prompt engineering matters less, as the system works out the best route to the result.
That makes agentic AI far more intuitive to work with. Using it feels more like interacting with a person or having a virtual team member.
Ultimately, agentic systems are a step towards ‘ambient AI’: solutions that run in the background, producing what you need, when you need it, without being prompted at all.
How Agentic AI transforms tax functions
Agentic systems have the potential to transform tax work in ways that Gen AI can’t.
Gen AI is essentially a productivity aid, while agentic AI offers problem-solving and judgement capabilities. That means it can handle tax activities that have an element of uncertainty.
For example, you could use an agentic AI system to determine the tax treatment of an invoice. It will decide how to get to the right answer by coordinating AI tools trained to:
It will identify which tasks to complete, in which order; carry out any necessary research; and flag where it may need additional data. All with little input from the tax team, which frees them up for more strategic tasks.
Power your tax function with agentic AI solutions
KPMG is investing in agentic AI to make life easier for tax teams. We’re about to release our first agentic functionality within Digital Gateway, our cloud-based platform for tax and legal teams.
It’s a powerful research tool, enabling clients to explore highly technical topics to a specified level of depth and quality. Its capabilities go beyond scouring the internet to find the answers. The solution figures out how to meet the research objective; and how best to present the information for the audience. And it reviews and iterates the outputs until they’re right.
Whether or not you use Digital Gateway, our tax and AI experts can help you get up to speed with agentic AI. We’ll deepen your understanding of the technology, how it works and its applications for tax functions.
Please get in touch to see how we can support your agentic AI journey.
This is the first article in our Agentic AI in tax series. Stay tuned as we explore real-world use cases and practical adoption strategies in upcoming articles.
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