This represents an impressive 6.9% year-on-year growth and “the broad rise in revenue can be attributed to enhanced strategies and the diligent implementation of compliance measures”.
More simply put, an increase in revenue collection directly results from an increase in broader taxpayer compliance, and some compliance initiatives stand-out in the crowd.
SARS Modernisation – The Age of Artificial Intelligence
SARS have been clear that they have, and will, take full advantage of technological advancements, including AI, data science, and machine learning algorithms, to counter criminality and non-compliance.
These data driven insights serve to inform SARS of all transactional records pertaining to specific taxpayers, and using AI, the “manhours”, and concomitantly room for error, is significantly reduced.
An entire team is no longer needed to extrapolate these records into strong legal cases for non-compliance, but rather tech-savvy individuals co-existing with AI. This collaborative approach enables SARS to gain access to a comprehensive dataset, facilitating more robust evaluations of taxpayers’ financial activities.
With SARS’ enhanced non-compliance detection capabilities and a sharp focus on both past and future non-compliance, correct tax and legal guidance has never been more critical. The most prudent approach to be taken, is to heed SARS’ warning that non-compliance will be both hard and costly for the offending taxpayer, with the Tax Administration Act offering up a laundry list of criminal offences for tax non-compliance.
These developments signal a need for heightened diligence in tax record keeping and reporting, with SARS clear in its mandate to collect revenue and eradicate non-compliance by whatever means necessary!
SARS Compliance Programme Ramping Up Collections
Echoing its strategic objective of making non-compliance hard and costly, interventions from SARS’ Compliance Programme generated a whopping R301,5 billion in compliance revenue!
Although accounting for only circa 13% of gross revenue collections, the 2024/25 Compliance Programme revenue demonstrates a 15,8% year-on-year increase – With SARS’ enhanced non-compliance detection capabilities and a sharp focus on both past and future non-compliance, correct tax and legal guidance has never been more critical!
Breaking the “compliance revenue” down further, the main contributors were resolving outstanding tax debts, and audits / verifications, across various taxpayer segments, where risks were flagged through the use of AI risk profiling:
Excerpt from SARS Media Release: SARS is committed to serving South Africans, published 01 April 2025
In a world slowly being taken over by AI, SARS has capitalised on this trend, enhancing their Audit capabilities to more than just a “quick count”, but rather proportions beyond anything previously thought possible!
Imagine having historically filed all your tax returns on time, making good on what you thought were your dues to SARS, and your Compliance Status reflecting as fully compliant. Now imagine waking up to a Notification of Audit and Request for Relevant Material, “based on risk(s) detected”.
Excerpt from a SARS issued Notice of Audit
Aiding SARS’ compliance crusade, are the data driven insights derived from AI use, including processing of taxpayer bank statements without any prior warning, or consent, and even gaining access to taxpayer information from Crypto-Asset Service Providers, upon request.
Rise of the Machines = Eradication of Non-Compliance
With SARS having access to information, including all financial records, and the right processing automation, the most prudent approach to be taken, for all taxpayers, is to heed SARS’ warning that non-compliance will be both hard and costly!
In order to protect yourself from financial ruin, and even possible jail-time, it remains the best strategy that you always ensure compliance – even though we are in the age of the machines, now is not the time to play Terminator.
Where you find yourself on the wrong side of SARS, there is a first mover advantage in seeking the appropriate tax and legal advisory, ensuring the necessary steps are taken to protect both yourself and your unblemished record, from paying the price for what could be the smallest of mistakes. However, where things do go wrong, and the data driven insights detect a “risk”, SARS must be engaged legally, and we generally find them utmost agreeable where a correct tax strategy is followed.
