Artificial intelligence (AI) and machine learning are assisting the South African Revenue Service (SARS) to weed out criminality and non-compliance.
This, as the tax authority’s compliance programme added R293.7 billion to revenue results as at the end of March − an increase of R61.9 billion (26.7%) from the previous year’s R231.8 billion.
It uses data, AI and machine learning algorithms to counter criminality and wilful non-compliance. These systems also ensure no legitimate refunds are denied, while preventing impermissible and fraudulent refunds, it states.
SARS yesterday announced its preliminary revenue results, showing it netted an amount of R1.74 trillion for the 2023/24 fiscal year, almost R10 billion higher than earlier estimates.
This means total tax revenue increased by R54 billion (3.2%) compared to the 2022/23 fiscal year, according to SARS.
Since its inception, SARS has collected R21.6 trillion in net tax revenue for the national fiscus.
According to SARS, it is determined to make it hard and costly for taxpayers who wilfully fail to meet their obligations, making its compliance programme a key pillar of its tax collection efforts.
Some of the programme’s successful endeavours include R91.3 billion debt collected from 2.6 million cases, including R420 million from 895 000 outstanding returns. In addition, voluntary disclosures contributed R3.5 billion, with 1 435 concluded applications.
“The investigations of syndicate crimes contributed R20.1 billion and executed 147 preliminary investigations made up of preservation orders and collapsing one tobacco and gold illicit financial flow scheme,” it states.
“The programme completed 230 000 customs compliance inspections and interventions, compared to the prior year’s 235 000 inspections. A total of R8.4 billion in customs-related assessments were raised, leading to the issuance of letters of demand.
“An outstanding debt totalling R2 billion was collected. We curbed impermissible claims related to the VAT export incentive scheme totalling R92 million and completed 6 550 customs seizures totalling R6.6 billion.
After a troublesome period characterised by state capture, SARS’s leadership embarked on a journey to “re-imagine” the organisation’s future, emphasising the need to boost its technological capacity.
The revenue authority has been vocal about utilising emerging technologies and deriving insights from data for its tax collection efforts.
In addition, the taxman has committed to attracting highly-skilled and experienced individuals in areas such as IT, data management, legal specialist services, and audit and risk.
According to SARS, rebuilding the organisation entailed broadening the tax base; instilling and improving a culture of voluntary compliance and fiscal citizenship; the seamless intersection of people, data and technology to optimally deliver on its mandate; and working with all stakeholders in the tax ecosystem.
It notes the tax register grew by 411 000 companies, of which 1 500 contributed R214 million in gross revenue in the year under review.
There are now 39 900 new employers voluntarily registered for PAYE, of which 19 000 contributed R2.7 billion additional tax, totalling R3.4 billion in the year under review.
Furthermore, the tax register grew by 57 700 new VAT vendors, of which 14 200 contributed R4.4 billion in gross revenue in the year under review. The tax register grew by 1.1 million individuals.
SARS commissioner Edward Kieswetter said: “The R21.6 trillion tax collections represent a compound growth of 9.9% per year since the inception of SARS in 1997. This has funded the South African democracy and touched the lives of millions who would be destitute without government support and services.”
Kieswetter added that the revenue achievements of the past 30 years would not have been possible if it were not for the effective and beneficial partnerships established by working with compliant stakeholders in the tax and customs ecosystems.
“Ultimately, we are augmenting the work of our employees, with the investment in data science, technology and artificial intelligence, towards the goal of making the fulfilment of tax obligation a seamless process.”
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