SOUTH AFRICA: Existing tech tools enough to tackle tax-dodgers, says SARS

he South African Revenue Service (SARS) argues it does not need any additional technology to go after taxpayers who are not meeting their obligations.

It is counting on the fact that what it already has in its arsenal in the form of artificial intelligence (AI) and advanced data analysis is enough.

Tasked with finding R1.986 trillion in tax for the fiscal year that came to an end on 28 February, the tax body told ITWeb: “SARS has the technology it needs. SARS will be intensifying the implementation of the rules to detect non-compliance.”

At its disposal are tools such as advanced data
analytics and AI “to detect tax-compliance risks, close the tax gap and improve overall compliance rates,” it says on its website.

The taxman has been given an additional R3.5 billion in the current financial year to go after people who evade paying tax. Preparation for the tax year has started, with the filing period being shortened to 21 July to 20 October 2025.

SARS’s data analytics abilities seek to identify patterns, anomalies and potential cases of tax non-compliance, while machine learning systems will improve detection of those who avoid paying tax. AI will enhance its ability to detect complex tax evasion schemes that might not be apparent through traditional auditing methods.

It is specifically going after people in the illicit economy, especially in high-revenue sectors such as tobacco, alcohol and fuel.

“Through enhanced enforcement against smuggling, counterfeit goods and black-market transactions, SARS aims to recover substantial revenue losses and deter future non-compliance within these sectors of the informal economy,” it says on its website.

“By integrating expanded third-party data sources, such as banking and
payroll
information, the system can increasingly automate tax assessments and more effectively identify underreported income, thereby strengthening efforts to combat tax evasion,” it adds.

The revenue service is now also assuming that people are actually honest and want to be assisted to meet their legal obligation, it said in a recent statement. “SARS is determined to make it hard and costly for taxpayers who wilfully fail to meet their obligations,” it said in its latest tax statistics report.

According to Alvin Botes, deputy minister of the Department of International Relations and Cooperation, South Africa loses an estimated $3.5 billion (R61.94 billion at the current exchange rate of R17.70 to the dollar) to $5 billion (R88 billion) each year “to tax abuse, trade mis-invoicing, illegal capital transfers and profit-shifting”.

The taxman’s revenue collection target comes against a backdrop of low economic growth, which the revenue service acknowledges will make collecting the targeted R1.986 trillion “challenging”. Yet, in response to finance minister Enoch Godongwana’s third National Budget, it committed to the task.

Godongwana said in his third iteration of the National Budget that SARS has indicated that this could raise R20 billion to R50 billion in additional revenue a year and that it would receive an extra R7.5 billion over the medium-term, partially to improve modernisation. This is a R3.5 billion increase of the amount announced in the second budget.

Godongwana had to present the speech three times after some parties in the Government of National Unity refused to accept proposed increases in value-added tax, which left National Treasury with a revenue hole of R75 billion.

Last year, SARS pulled in “a record gross amount of R2.155 trillion” from 25.9 million people, with R260.5 billion coming in through its stringent compliance programme. This is according to its latest tax statistics report.

In the National Budget speech, Godongwana said: “I thank all compliant taxpayers who pay their fair share of taxes. I also encouragethose that are not compliant to do the right thing.”