IITPSA welcomes SARS moves to harness big data, AI for tax collection
The Institute of Information Technology Professionals South Africa (IITPSA) has welcomed the plans by the South African Revenue Service to use big data analytics and artificial intelligence to improve revenue collection and locate tax evaders.
IITPSA board member Moira de Roche says the move is welcome, if overdue. “It should have been done years ago. The more efficiently SARS collects tax that is due, the better off we will be as a country. It has been relatively easy for people to dodge tax before now, so it is a move in the right direction to start using all the data that exists across various government departments and deploying AI to identify trends and potential fraud.”
However, even though the technologies are mature and all the necessary data exists, she believes implementing such a project could prove challenging. “It’s going to be tough. The data has been there for a long time, but one thing we are not good at in South Africa is cross-pollinating and sharing data.”
IITPSA President Thabo Mashegoane likewise welcomed the news: “As the industry body for ICT professionals, IITPSA is confident that our sector has the solutions the government needs to overcome many of its challenges. The necessary analytics and AI tools have long been mature enough to be entrusted with a task as important as tax revenue collection and fraud management.”
Johan Steyn, Chair of the IITPSA Special Interest Group on AI & Robotics, expects to see advanced big data analytics platforms underpinned by machine learning technology to be the technological foundation for SARS. “Cloud computing platforms can enable this. In addition, intelligent automation platforms for smart process automation is a key consideration, and the use of edge computing and smart sensors would support taxation validation on goods at ports of entry.”
He notes that in its report: Advanced Analytics for Better Tax Administration, the Organisation for Economic Co-operation and Development (OECD) highlights the issues that tax authorities face when implementing artificial intelligence and advanced data analytics.
Steyn says: “The report speaks to organisational culture considering the smart technology era. This is an important point relevant to all organisations. The technology is often feared and misunderstood, especially by the executive leadership layer. The report also speaks to the suitable use of advanced analytics data and the challenges around skills. For SARS to successfully implement smart technology, it should first consider the business challenges and the change management around its people and processes. It should never be technology- or platform-first initiatives. They should also partner with suitable technology providers in outcome-based and risk-sharing programmes. The upskilling of workers and the transfer of IP is essential.”
De Roche notes that SARS does appear to have a plan to source the necessary skills. “They plan to employ all the right people. Where they went wrong in the past was to outsource major projects, with little or no transfer of skills back into SARS. They need to develop the necessary data science skills in-house, as these will be core to their business.”
Security, ethics and governance crucial
IITPSA notes that security and the protection of personal information will be of paramount importance, to protect citizens’ personal data both from hackers and internal misuse.
De Roche says: “Cyber security will be a major issue, especially when they have data across banks, vehicle registrations and more. This is also where ethics comes in – SARS wants to use people’s data for legal, honourable purposes, but it would not be ethical if they failed to take good care of that data. They must protect this data with comprehensive internal and external security.”
Says Steyn: “Topics like ethics and privacy are essential to the smart technology era. SARS can use this technology to execute its mandate more efficiently. But with more data on individuals and corporations, it can also provide an opportunity for SARS employees to operate outside of their mandate. This may include the use of personal financial information, collected and analysed by artificial intelligence agents, to criminal ends. The protection of personal information is crucial. SARS’ data governance frameworks should be a key consideration on this journey. Malicious agents, albeit corporate espionage or state-sponsored hackers, would be increasingly attracted to the data stored and used by SARS.
"Another important consideration is the taxation of international, platform-based companies that collect fees in South Africa but are not taxed.”