Taxation is vital for national governance, and the digital transformation of governments necessitates smart taxation. Therefore, analyzing the key issues and exploring the development ideas for smart taxation is of both theoretical and practical values. In this study, following an analysis of the development status and challenges facing China's intelligent taxation field, we proposed a big data knowledge engineering approach that emphasizes data knowledgeization, knowledge systematization, and knowledge reasonability, and developed a five-layer technical architecture that consists of knowledge sources, knowledge extraction, knowledge mapping, knowledge reasoning, and application layers. After elaborating the representative application scenarios including knowledge-driven tax preference calculation, interpretable tax risk identification, intelligent decision support for tax policies, and smart tax questioning, we investigated the limitations of the proposed approach and further discussed the directions for future research. Furthermore, we proposed the following development suggestions in terms of data, technology, and ecology: (1) standardizing tax-related information and improving the national data sharing, opening, and guarantee system; (2) integrating the achievements of various information disciplines and improving the application system of big data knowledge engineering for smart taxation; and (3) promoting talent training and the development of technical standards for big data knowledge engineering.