Rédaction Africa Links 24 with Neesa Moodley
Published on 2024-02-26 18:45:20
Last year, the Minister of Finance allocated R1-billion a year to the South African Revenue Service (SARS) for its modernisation programme, spanning over three years. The SARS commissioner, Edward Kieswetter, reported that the strategic use of artificial intelligence (AI) and proactive measures led to the recovery of an impressive R210-billion during the first 11 months of the current tax year.
Kieswetter emphasized the correlation between economic conditions and taxpayer compliance, stating that during times of economic prosperity, individuals are more likely to fulfill their tax obligations. However, amid widespread job losses and inflationary pressures, people tend to prioritize their expenses, sometimes delaying payments to SARS.
The outstanding SARS debt has climbed to R300-billion, with Kieswetter clarifying that this amount represents debts acknowledged by taxpayers who are unable to pay, rather than those disputing the liabilities. This significant sum reflects the financial strain faced by many individuals and businesses in the current economic climate.
One area where SARS has effectively employed AI is in debt propensity modeling. By leveraging machine learning algorithms, SARS identifies cases with the highest likelihood of successful debt recovery while optimizing resource allocation. This targeted approach enables SARS to prioritize engagements with entities most likely to settle their dues expediently, enhancing overall efficiency.
As of January 31st, SARS successfully recovered the R210-billion for the current fiscal year through various interventions:
– R70-billion was retrieved using AI and debt propensity algorithms, resulting in the resolution of approximately 2.1 million debt cases, issuance of over 100,000 final demand letters, and nearly 24,000 civil judgments.
– R67-billion was recovered through data science, analyzing around 14 million tax returns to identify high-risk cases for further scrutiny by SARS auditors. This rigorous evaluation process helps to verify the accuracy of tax submissions and recover owed amounts.
– R57-billion was reclaimed through refund risk management, particularly focusing on preventing fraudulent or impermissible VAT, personal income tax, and corporate tax refunds. SARS halted billions of fraudulent refund claims, safeguarding the government revenue.
– R9-billion was recouped from customs fraud, including the interception of illegal or undervalued goods at the border. SARS intercepted cargo valued at billions of rands, deterring smuggling and preserving customs revenue.
– R5-billion was retrieved from combatting illicit trade, with interventions targeting illicit tobacco and alcohol activities. This effort resulted in detentions, seizures, and substantial recoveries, bolstering compliance in these sectors.
Overall, SARS’ modernization initiatives, encompassing state-of-the-art technologies and strategic enforcement measures, have significantly enhanced revenue collection and compliance efforts. The utilization of AI, data science, and targeted interventions has proven instrumental in addressing tax arrears, combating fraud, and safeguarding government revenues. By embracing innovation and proactive strategies, SARS continues to strengthen its operational capabilities and adapt to the evolving economic landscape.
Read the original article on Daily Maverick
