South Africa Gears To Use Artificial Intelligence (AI) In Making It Harder – And Costlier – For People To Evade Tax

By  |  February 6, 2020

The South African Revenue Services (SARS) had disclosed its intention to use data-driven insights, self-learning systems and AI to fight tax evasion. The move, which aims to enable SARS become modernized, will make tax evasion not just harder, but also costlier.

SARS will be hiring several executives in data-driven positions to harness the power of Big Data and AI. The tax collector is also revamping its systems to provide more digital and streamlined services to the public.

To inspire confidence, in part, SARS wants to provide clarity and certainty of tax obligations, which will make it easier for taxpayers and traders alike to comply.

The collector’s Commissioner, Edward Kieswetter, says that the body must, in future, be able to respond to a new data-driven global environment while making good on its higher purpose of enabling the government to build a capable state.

Ever since Kieswetter joined SARS, he has been advocating for the organization to boost its technological capacity and derive insights from data that will help re-imagine its future.

“This recruitment process will reaffirm SARS’s commitment to the transformation agenda of our country and the advancement of employment equity and diversity in the workplace,” he said.

On the national front, this move adds to the series which garners the country the acclaim of Africa’s most advanced/innovative economy. While other countries on the continent face the same tax problem, using such new-age technologies to identify tax-dodgers is textbook.

A report by the United Nations Economic Commission for Africa (UNECA) estimates that African countries loose over USD 50 Bn every year to illegal financial outflows mostly characterized by tax avoidance and evasion.

Kenya also, taking the IMF’s advice, has resorted to innovative solutions to to boost tax revenue. The Kenya Revenue Authority (KRA) used the Excisable Goods Management System (EGMS) to tag and trace a wide variety of products and prevent both counterfeiting and tax avoidance.

Since KRA’s move, which was followed by iTax – another technological solution – made tax compliance rise by an impressive 45%, it is expected that AI will help South Africa achieve something similar.

The Togo Revenue Authority (OTR) is the first in the 14-member CFA franc zone to unify national tax and customs services. Since it was created in 2014, the OTR has successfully streamlined both processes and cut staff numbers by 17 percent.

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