Artificial intelligence has already begun transforming industries, services and decision-making around the world. The technology covers a broad range of applications, from service automation and predictive models to the analysis of large datasets and natural language processing. As AI becomes increasingly capable of learning, adapting and delivering results in more complex fields, new opportunities arise along with new challenges, particularly for the public sector.

In public administration, artificial intelligence plays a key role in improving efficiency, services and policymaking. By making targeted use of data, institutions can make more informed decisions, respond more quickly, prioritise more effectively and simplify communication with the public. AI also creates new opportunities to promote equal access to services and identify irregularities or inequality that might otherwise go unnoticed.

The use of artificial intelligence requires caution and responsibility. Public institutions have a particular duty to ensure that the use of AI is transparent and complies with laws and regulations, privacy requirements and principles of fairness. Decisions supported by AI must be traceable, explainable and justifiable to individuals and businesses, especially where such decisions affect rights or obligations.

In this context, the public sector must pay particular attention to:

• Data collection and data quality

• Privacy and other legislation relating to artificial intelligence

• Traceability and explainability

• Knowledge, education and governance

When AI is used in this way, it becomes a powerful tool for improving services, equality and efficiency in public administration.

Vision

Iceland Revenue and Customs aims to be a leader in the use of artificial intelligence within Icelandic public administration. Through focused development and responsible implementation of AI technology, Iceland Revenue and Customs will improve services for individuals and businesses, increase efficiency and strengthen outcomes in supervision, investigations and customs control, thereby promoting transparency and equality in the enforcement of tax and customs legislation.

Professionalism, security and trust are key principles in the use of artificial intelligence. To ensure that AI is used responsibly, employees must have the necessary knowledge and skills.

Core principles

The core principles guiding the development and use of artificial intelligence at Iceland Revenue and Customs can be found here: Policy on the development and use of artificial intelligence at Iceland Revenue and Customs.

These principles provide guidance whenever Iceland Revenue and Customs uses AI. This policy was developed with those core principles in mind.

Priorities for 2025–2027

Increased efficiency and automation in services

Iceland Revenue and Customs will use artificial intelligence to increase automation and efficiency in customer services. Automated digital handling of common enquiries will reduce workload for employees and shorten processing times. At the same time, emphasis will be placed on personalised services that take account of the needs and circumstances of each customer. This will make communication with Iceland Revenue and Customs more efficient and effective.

Improved tax and customs supervision

Artificial intelligence will be used to shorten processing times in audit procedures and real-time supervision by analysing data more quickly and accurately. Models and algorithms will be developed to identify irregularities in data and improve the institution’s ability to respond promptly to errors or fraud. This will make audits and supervision more targeted, fair and efficient.

Privacy, transparency and ethical use of artificial intelligence

Iceland Revenue and Customs uses artificial intelligence in accordance with clear ethical standards and privacy legislation. The institution has adopted internal rules on privacy and the processing of personal data, as well as ethical guidelines for the data science department. Established rules governing the use of AI will be followed, and all information processing will be transparent, traceable and understandable for customers.

Strengthening employee knowledge and skills

To ensure the successful and responsible implementation of artificial intelligence, employees will be offered education and training. Courses will be provided on the opportunities, challenges and responsibilities associated with the use of AI in public administration. An internal AI working group within Iceland Revenue and Customs provides leadership and professional oversight in the development, implementation and ongoing supervision of this technology. This also supports a culture of innovation and continuous improvement within the institution.

Follow-up and responsibility

The Digital Transformation Division is responsible for monitoring the implementation of this policy and works closely with the professional and support divisions of Iceland Revenue and Customs in carrying it out.

Validity period

This policy applies for the period 2025–2027 and is reviewed at least annually.

Approved by the Executive Board on 11 June 2025.