Source: Moneyweb

The South African Revenue Service (SARS) has significantly enhanced its tax enforcement capabilities by leveraging artificial intelligence (AI) to identify tax evasion and improve compliance. Using AI-powered tools, SARS can now analyze vast amounts of data more efficiently, allowing it to detect suspicious patterns and discrepancies that would be difficult for human agents to identify. This shift toward AI-driven tax enforcement is part of SARS’ broader strategy to modernize its operations and ensure that all taxpayers meet their obligations.

The article explains that AI is being used to cross-reference multiple data sources, including banking records, property ownership, and transactional histories, to flag inconsistencies in tax filings. This allows SARS to target non-compliant taxpayers more effectively, reducing the time and resources spent on audits. AI tools also help SARS identify potential fraud, such as underreporting of income or overstatement of deductions.

With AI’s ability to handle large datasets and perform real-time analysis, SARS is expected to improve tax collection rates and minimize revenue losses due to tax evasion. However, the article also highlights concerns over privacy and the need for robust data protection measures. While AI-driven enforcement offers efficiency gains, it raises questions about how taxpayer data is being used and secured.

Taxpayers are urged to ensure that their tax filings are accurate and compliant, as the enhanced AI capabilities of SARS mean that even minor discrepancies are more likely to be flagged for review. The article concludes by noting that AI is set to play an increasingly important role in tax enforcement globally, and South Africa is at the forefront of adopting these technologies to strengthen its tax system.