Digitalisation, Artificial Intelligence, and Corporate Tax Compliance in Emerging Economies: The Moderating Roles of Institutional Quality and Taxpayer Trust

Abstract

Tax compliance remains a major challenge in emerging economies due to institutional weaknesses, limited administrative capacity, and low taxpayer trust. This study examines how the digitalisation of tax administration and the adoption of artificial intelligence (AI) tools influence corporate tax compliance behaviour. Drawing on the Slippery Slope Framework, the Technology Acceptance Model, and institutional theory, we develop and test a model in which digitalisation and AI adoption enhance compliance both directly and indirectly, with institutional quality and taxpayer trust acting as key moderators. Using survey data from 387 tax managers and finance executives of medium and large enterprises across India, Serbia, and three other Southeast European emerging economies, combined with World Bank institutional quality indicators, we apply structural equation modelling (SEM) and multi-group analysis. Results show that digitalisation and AI-enabled tools significantly improve voluntary tax compliance, with stronger effects under higher institutional quality and greater taxpayer trust. AI adoption partially mediates the digitalisation–compliance relationship. Robustness checks confirm the stability of the findings. The study integrates technological, behavioural, and institutional perspectives and offers practical insights for modernising tax systems in emerging markets.