Enhanced Technology Adopted for Financial Management in Hesse - Enhanced Technology Rollout for Finance Departments in Hessen
Increased Digitalization and AI Integration in Hesse's Financial Offices
Hesse taxpayers received their income tax notices a week earlier last year compared to the previous year, with accelerated digitization being the primary factor, Finance Minister Alexander Lorz (CDU) announced during the annual report of the Upper Finance Authority in Frankfurt.
The finance ministry plans to further leverage artificial intelligence (AI) in its operations. Since 2019, an AI research center has been operational in the Finance Office in Kassel, which was expanded significantly last year and currently employs 40 individuals. More staff will be added in the future.
AI is being utilized in the evaluation of extensive datasets, such as the Panama Papers, and has already automated half of all property tax notices, according to Lorz. Additionally, AI will be applied in Cum-Cum suspicion cases (dividend stripping). By 2024, an innovation hub for digital testing techniques will be established at the Finance Office in Gelnhausen.
Upper Finance President Konstanze Bepperling reported a positive impact of digitization on citizens. On average, income tax returns were processed within 44 days last year, which represents a new record, seven days faster than the previous year. Approximately 84 percent of income tax returns in Hesse are now submitted digitally via the Elster portal, and around a quarter of employee tax returns are processed automatically.
In terms of staffing, all 3,800 positions in the tax administration were filled in 2024 for the first time in decades. The shift of many positions to the field played a significant role in achieving this milestone.
The Upper Finance Authority, housed in Frankfurt, is an intermediate authority of the Hessian tax administration. It operates between tax offices and the finance ministry.
While specific details about the utilization of AI in Kassel and Gelnhausen are not available, AI could potentially be employed in these areas to improve fraud detection, automate routine tasks, and enhance efficiency as part of broader smart city projects.
AI is increasingly being adopted in tax administrations across Europe to boost efficiency and minimize errors. Key applications include risk detection, automated processes, and digital security. In Germany, initiatives like URBAN.AI are focusing on integrating AI solutions into local governance, potentially encompassing tax administration.
- The Finance Minister of Hesse plans to expand the AI research center in the Finance Office in Kassel, aiming to further utilize AI in employment policies for the evaluation of extensive datasets and automation of routine tasks, such as property tax notices and Cum-Cum suspicion cases.
- With the increasing digitization and AI integration in Hesse's financial offices, the Upper Finance Authority aims to establish an innovation hub for digital testing techniques at the Finance Office in Gelnhausen by 2024. Potential uses of AI in this hub include fraud detection, automation of routine tasks, and enhancement of efficiency as part of broader smart city projects.
