SARS banks on data, tech in 2022 tax season

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The South African Revenue Service (SARS) says the use of technology has not only enabled it to improve filing processes for taxpayers, but also enhanced its capability to detect instances of non-compliance.

The revenue authority will open the 2022 tax filing season tomorrow, with over three million individual non-provisional taxpayers to be auto-assessed by SARS.

In a statement, SARS says the use of data, artificial intelligence (AI) and algorithms enables it to make it easy for most individual taxpayers to comply with their legal obligations.

Among the most notable uses of data is the introduction of the auto-assessments initiative, states SARS, which aims to simplify the tax return process.

By using third-party data received from employers, pension fund administrators and medical aid schemes, SARS is able to complete the tax declaration on behalf of a large segment of taxpayers and issue them with an auto-assessment.

“All these innovations support our strategic objective of providing clarity and certainty to help foster a culture of voluntary compliance.

“At the same time, the use of technology and data has also enabled SARS to significantly sharpen its capability to detect non-compliance and to make such non-compliance hard and costly,” it notes.

SARS commissioner Edward Kieswetter adds: “Auto-assessments are a key innovation designed to improve SARS’s service offering to taxpayers. It follows the principle that the best service is no service and will allow SARS to explore the possibility of eventually having no filing season, as we have come to know it.”

In the past, the revenue authority’s IT systems were the subject of much debate.

Under its current leadership, SARS has a new vision to become a smart, modern revenue service, where increasingly its work will be informed by data-driven insights, self-learning computers, AI and interconnectivity of people and devices.

According to SARS, it plans to continue to enhance its service by adding more digital offerings to enable taxpayers to transact with SARS without visiting its branches.

Its digital offerings include eFiling, the SARS MobiApp, website and contact centre.

It states: “SARS will impose understatement penalties to taxpayers that deliberately attempt to claim impermissible expenses or understate their income, as well as administrative non-compliance penalties to those taxpayers that do not adhere to the applicable deadlines of this filing season.

“Taxpayers should be aware that SARS has access to various sources of data, which enables us to track economic activity and verify the completeness and accuracy of tax declarations.”

The 2022 tax season for non-provincial taxpayers will begin on 1 July and close on 24 October. For those non-provisional taxpayers that don’t receive an auto-assessment, they can file their tax return using any of SARS’s digital offerings.

Provisional taxpayers, including trusts, have from 1 July to 23 January 2023 to file via eFiling or the MobiApp.

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