The South African Revenue Services (SARS) has already paid out about R10 billion in refunds to at least 1.6 million taxpayers who were auto-assessed ahead of this year’s Tax Season.This is according to SARS Commissioner, Edward Kieswetter who was briefing the media on Tuesday.

In the first two weeks of July, at least five million taxpayers were auto-assessed by the revenue service.

‘We completed these annual returns and tax assessments while, simultaneously, running each assessment outcome through our compliance risk and tax fraud detection capability. All this is possible because of the investment that we have been able to make in increasing and expanding the use of third-party data in the past few years.

‘We’re able to process over 90% of refunds for taxpayers that are not selected for verification within 72 hours through our fraud risk detection AI. We direct high risk taxpayers – for whom we suspect there may be a fraudulent or impermissible refund – for further verification,’ he said.

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In order to complete auto-assessments accurately, SARS harvested nearly 150 million third-party data records. This information was then processed through the application of artificial intelligence and enhanced machine learning algorithms.

‘We are extremely reliant on employers, banks and other third-party information providers to provide us with accurate data. The integrity of the entire value chain of data is important. We have worked extremely hard this past year with large institutions and entities to improve the accuracy of bulk data submissions.

‘We appreciate the partnerships with all third-party data providers to enable a seamless experience for taxpayers. Inaccurate data, or late data, causes downstream difficulties and unnecessary delays and frustrations for taxpayers.

‘SARS uses sophisticated graph database technology to decipher billions and billions of rows of data that allows us to compose a single entity view of a taxpayer and this, in turn, allows us to pro
duce an assessment outcome as well as conducting the necessary risk detection through the artificial intelligence methodologies,’ he said.

Kieswetter added that the AI tool used by SARS to detect fraud has saved the fiscus billions of Rands in fraudulent refunds.

‘Last year alone, this fraud detection capability prevented almost R100 billion of impermissible PIT and VAT [Personal Income Tax and Value Added Tax] refunds from being paid out and lost to the fiscus,’ he said.

Source: South African Government News Agency