Federal Tax Administration (ESTV) relies on AI for its knowledge management.

Overview Initial Situation and Solution Facts & Figures Benefits Customer Statement

The Federal Tax Administration (FTA) is the central tax authority of the Swiss Confederation and is subordinate to the Federal Department of Finance (FDF). It employs more than 1,000 people. Its main responsibilities include collecting value-added tax (VAT) and withholding tax, as well as supervising the collection of the direct federal tax, which is carried out by the cantons on behalf of the federal government (non-exhaustive list).

In addition, the FTA coordinates cooperation with the cantons, ensures the consistent application of tax law through directives and circulars, and monitors the implementation of tax legislation. It supports citizens, businesses, and public authorities with questions regarding federal taxes and contributes significantly to the financing of the federal government through its revenues.

Overview

The Swiss Federal Tax Administration (FTA) faced the challenge of efficiently using its extensive tax law knowledge, spread across various formats and systems, to answer taxpayer inquiries accurately and promptly.

With the Proof of Concept “PocKnowAI,” a generative AI based on Microsoft Azure AI was successfully implemented. It delivers precise, context-relevant answers with transparent source citations.

Initial Situation

The ESTV has an extensive but unstructured knowledge base in the field of tax law. This knowledge exists in various systems and formats — such as PDF documents, HTML pages, or XML documents.

To answer taxpayers’ tax law inquiries, ESTV employees had to spend considerable time searching for and extracting relevant information from these knowledge pools. This challenge was further compounded by a demographic-driven loss of expertise.

Solution

As part of a Proof of Concept, a generative AI was successfully implemented to support ESTV employees. The system simplifies access to publicly available specialist knowledge by providing precise, context-relevant answers. Particular attention was paid to transparent and accurate source citations, with a linking system realized at the article and page level.

The platform was enriched with a limited number of specific documents from the areas of value-added tax and withholding tax, as well as relevant legal texts, regulations, and court rulings.

Thanks to the iterative approach and continuous improvements, the hit rate for document searches increased significantly over the course of the project.

The AI platform is based on Microsoft Azure AI, with the user-friendly interface built on Microsoft Azure and Microsoft .Net.

accurate and positively evaluated answers

positive user ratings

Benefits

With the Proof of Concept, it was successfully demonstrated that an AI-based solution for the ESTV is feasible and that the technology is ready for productive use.

Employees value the AI platform as a valuable support that noticeably eases their daily work and increases their efficiency.

The evaluation, based on a limited set of documents, enabled a targeted analysis of answer quality. While simple inquiries were answered reliably, more complex questions revealed certain weaknesses — particularly in source identification and content depth. These observations are typical for modern AI systems and provide valuable insights for further development and optimization.

Marcel von Arx

CTO | Eidgenössische Steuerverwaltung ESTV

«With the proof of concept «PocKnowAI», we took the step to explore the possibilities of AI through a concrete use case – and did so successfully. The solution developed by isolutions already surpasses major platforms such as ChatGPT, Copilot, or Perplexity in certain ESTV-specific scenarios.»

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