SARS Supercharges Tax Collection With AI Muscle and R7.5 Billion Boost

The South African Revenue Service (SARS) is getting a high-tech upgrade – and it’s not just about new coffee machines in the break room. Armed with artificial intelligence, sharper data analytics, and a R7.5 billion budget boost over the next three years, SARS is gearing up to meet an ambitious new revenue target.

Finance Minister Enoch Godongwana, delivering his third national budget speech last Wednesday, dropped a big number: R1.986 trillion. That’s the amount government aims to collect in taxes for the 2025/26 financial year – and he’s counting on SARS to make it happen.

And here’s the twist: SARS isn’t starting from scratch. In fact, they recently overachieved, pulling in R1.86 trillion for 2024/25 – that’s R8.9 billion more than expected (unofficially, for now).

Still, SARS knows the road ahead won’t be easy.

“The R1.986 trillion revenue estimate is a challenging estimate,” SARS said in a statement Wednesday. “The estimate announced by the Minister imposes the responsibility on SARS to implement revenue-raising initiatives.”

Translation? They’re going full throttle – and AI is riding shotgun.

So, what’s the plan?

SARS says it’s going all-in on smart tools to close the tax gap and boost compliance. Here’s how:

• Data is the new tax detective: By integrating third-party info – think banks, payrolls, and other data sources – SARS can automate tax assessments and flag underreported income like a pro. That’s less wiggle room for creative accounting and more muscle against tax evasion.
• Cracking down on the underground economy: SARS is sharpening its focus on high-revenue, high-risk sectors such as tobacco, alcohol, and fuel. Smugglers and counterfeiters, beware – the heat is on.
• Widening the tax net: Expect more effort to bring informal sector players – like small businesses and freelancers – into the tax fold. If you’ve been flying under the radar, it might be time to get your paperwork in order.
• Closing the compliance gap: SARS is investing in cutting-edge systems and skills to stay ahead of dodgers and delinquents. With AI in the mix, the taxman is getting smarter, faster, and more precise.

In a world where economic conditions are anything but predictable, SARS is betting big on tech to future-proof its revenue streams. And with nearly R2 trillion on the line, it looks like every byte will count.