In April 2024, I discussed the implications of using artificial intelligence (AI) tools for managing corporate tax risks, particularly regarding value-added tax (VAT). As businesses increasingly rely on AI, concerns arise about diminishing cognitive skills and investigative abilities among employees. For instance, many struggled with basic tasks, exemplified by a UAE incident where individuals couldn’t pump their own petrol after their dependence on automated services grew. A 2025 MIT study showed that those using AI demonstrated weaker cognitive connectivity and struggled to reference their outputs. Companies must consider whether their regulatory functions encourage critical thinking or provide rote responses. Moreover, external AI initiatives like the UAE’s Federal Tax Authority’s FTAgpt underscore the necessity for effective query formulation to achieve optimal results. As reliance on AI intensifies, organizations should prioritize enhancing human competencies to mitigate risks and ensure comprehensive understanding within their teams.
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