France’s tax office turns to AI after major hack

The large-scale hack of France’s tax office in June and July accelerated the government’s award of a contract to French artificial intelligence firm Mistral.

One of Europe’s few significant AI companies, Mistral is often hailed as an example of French excellence. In October, it launched Mistral Large 4, intended to narrow the gap with leading US and Chinese companies, which use AI to improve AI and announce upgrades roughly every six weeks.

Cybersecurity featured prominently in the contract announcement. Mistral will initially be deployed at the Direction générale des finances publiques (DGFiP) to strengthen protection.

“Cybersecurity is a government priority,” said David Amiel, minister for public action and accounts. “It is urgent that we use AI to counter AI and it is an essential part of the contract we have with Mistral,” he added.

The finance ministry announced a €200million increase in its cybersecurity budget in April, but only €6 million will fund Mistral. AI can be expensive to run, with usage allowances running out faster on complex tasks.

The DGFiP already uses Google AI to detect tax fraud, comparing satellite photographs with tax records to identify undeclared swimming pools, sheds and extensions.

Mistral will compare social media accounts with tax returns, looking for lavish lifestyles apparently inconsistent with declared income. It will also check online shopping sites for discrepancies between goods sold and amounts declared.

Other priority clients include the justice ministry and the finance ministry itself.

Justice officials hope AI will help clear thousands of cases backlogged following successive government staffing cuts. Meanwhile, lawyers using AI to prepare cases faster and in greater depth have increased the number reaching court.

Protests took place across France during the summer after the murder in Gers of 11-year-old Lyhanna by a man previously accused of sex crimes. The handling of earlier cases involving the suspect raised questions about failures in the justice system.

The government promised to prioritise sex crimes, increasing delays for other cases. Mistral’s tools are expected to help investigating magistrates and prosecutors reduce the backlog.

The finance ministry’s budget department will also use AI to analyse government data, seeking spending reductions through measures such as eliminating duplication.