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Machine learning in taxation

Machine learning in taxation

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Machine learning in taxation

  1. 1. Save taxes without breaking laws using ML Novel use cases for ML in the accounting and tax space
  2. 2. Intro • Chartered Accountant and former tax analytics director at EY • Co-founder at a data sciences solutions startup • Currently building GST solutions with data sciences
  3. 3. Why ML in taxes? • Finding tax savings options without breaking the law is the holy grail in tax consulting. There are differences in impact of taxes, therefore opportunities, for e.g – The effective tax rate for a company making a profit up to Rs 1 crore was 30.26% in 2015-16 while the corporate tax rate was 25.90% for those with profits greater than Rs 500 crore – Drugs and pharmaceuticals paid tax at 24.2%, electronics paid tax at 35.5% Source: Indiaspend.com
  4. 4. Tax laws are not really English The major input variables are not simple: A. Laws are unstructured text data and are continuously changing B. Legalese is not exactly English C.Financial statements are a mix of structured and unstructured information D.The level of precision required in tax decisions is high
  5. 5. Our method to the madness • Tokenization • Stemmers / Lemmatizers • String distance algorithms • LSTM models Combined with • Tax and accounting domain knowledge
  6. 6. Our key learnings • Domain knowledge trumps ML results in ultimate decision making • Kaggle style ensembling and blackbox solutions are much harder to sell • Feedback and reinforcement learning is critical to achieve higher accuracy • Feature engineering is very important
  7. 7. Thankyou Twitter: gsj2 Email: jay@vyakya.com Linkedin: https://www.linkedin.com/in/jayendrangs

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Machine learning in taxation

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