More than three-quarters of taxpayers have already received auto-assessments, and refunds worth R10.6 billion have been paid out, according to the South African Revenue Service (SARS), as its investment in artificial intelligence (AI) begins to show significant returns.
The auto assessments and refunds were processed ahead of the official start of manual filing, which opened on Monday morning. SARS says most refunds were paid within 72 hours, enabled by data integration, AI and data science.
Codera Analytics notes National Treasury figures show the number of taxpayers has grown by about a million over the past decade, reaching an estimated 7.5 million for 2024/25.
SARS says its auto-assessment solution “is in keeping with our aspiration to make tax just happen”. This year, 5.8 million taxpayers received auto-assessments, up from five million last year.
SARS assesses returns using third-party data – sourced from employers, banks, medical schemes, retirement funds and insurers – without any input required from the taxpayer for auto-assessments, its website notes. “Taxpayers do not have to do anything when they are issued an auto-assessment.”
This process relies on AI, machine learning and data science tools. These systems enable SARS to detect tax-compliance risks, close the tax gap and improve overall compliance. In a statement today, the revenue authority says this is part of its broader digital transformation plan to become “a smart, modern SARS” by 2030, with the investments already “bearing fruit”.
According to SARS’s latest annual report, for 2023/24, “the next five years are going to be exciting” as the organisation builds on its existing work to harness “the transformative power of technology, data science and AI in tax administration”.
SARS commissioner Edward Kieswetter told members of Parliament earlier this year that future innovations include a “unique digital identity system” being developed in collaboration with the Department of Home Affairs and the South African Reserve Bank.
“We cannot do our work in the digital economy without the appropriate investment in people, data science and enabling technologies such as AI and our digital platform,” said Kieswetter in his overview to the annual report.
SARS says more than 2.1 million taxpayers have interacted with the agency through its digital channels. Of these, 1.1 million used the SARS Online Query System, 707 000 connected via WhatsApp, and 290 000 engaged through the Lwazi chatbot. Since 4 July, more than 10.2 million unique users have logged into the system via eFiling or the SARS MobiApp.
The revenue service says those who need to file manually can use either eFiling or the MobiApp. “Most of these returns are assessed in less than five seconds,” it says, noting this assumes the submission is in order.
The taxman is also tightening enforcement. The agency has been allocated an additional R3.5 billion in the current financial year to pursue non-compliant taxpayers. Following the presentation of the National Budget, SARS indicated the expanded budget could raise between R20 billion and R50 billion in additional annual revenue.
Over the medium-term, it is expected to receive R7.5 billion more to further improve its modernisation efforts, a R3.5 billion increase over the allocation in the second budget.
Last year, SARS collected “a record gross amount of R2.155 trillion” from 25.9 million people, with R260.5 billion raised through its compliance programme, according to its most recent tax statistics report.
Finance minister Enoch Godongwana noted in the annual report that SARS, established in 1997, has collected a total of R21.5 trillion in net tax revenues since it was created. Presenting the third iteration of the National Budget – after the previous two failed to be passed in the National Assembly – he tasked the agency with collecting R1.986 trillion for the fiscal year ending 28 February, despite sluggish economic growth.
Individual taxpayers have until 20 October 2025 to file their returns, as SARS has shortened the filing period.
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