By Pieter van Heerden – Director: Ascendant Financial Services
The South African Revenue Service (SARS) is having success in its efforts to combat tax non-compliance. The use of data analytics and monitoring of bank accounts has proven to be an effective tool in identifying tax evaders, particularly those whose lifestyles are not consistent with their reported income. This approach allows SARS to flag potential discrepancies and investigate further, which can lead to the recovery of unpaid taxes.
By leveraging technology and data, SARS is able to cast a wider net and catch those who might be attempting to avoid paying their fair share of taxes. This not only helps to increase revenue for the government, but also promotes fairness and equity in the tax system.
It will be interesting to see how SARS continues to utilise these tools and strategies to combat tax evasion and non-compliance in the future.
The South African Revenue Service (SARS) has announced a record-high in gross revenue collection, with R2.303 trillion collected at the end of March 2025. This represents a 6.9% year-on-year growth, with the collected net amount being R1.855 trillion, which is R8.8 billion higher than the revised estimate and R114 billion more than the previous year.
SARS attributes this success to enhanced strategies and compliance measures, including the use of technological advancements such as artificial intelligence (AI), data science, and machine learning algorithms to identify and counter, tax evasion. The tax authority has been monitoring bank accounts to identify taxpayers whose lifestyles do not match their tax contributions, and this approach has proven effective.
The use of AI has significantly reduced the need for manual processing, allowing SARS to access a comprehensive dataset and make more robust evaluations of taxpayers’ financial activities. This collaborative approach between humans and AI has enabled SARS to build stronger cases against non-compliant taxpayers.
Some key statistics from the announcement include:
– Gross revenue collection: R2.303 trillion
– Collected net amount: R1.855 trillion
– Year-on-year growth: 6.9%
– Refunds paid out: R448 billion (an 8.2% increase from the previous year)
– Increase in collected net amount compared to the previous year: R114 billion
Overall, SARS’ efforts to combat non-compliance and utilise technological advancements have yielded significant results, and the tax authority is expected to continue using these effective tools to identify and counter tax evasion.
The article highlights the South African Revenue Service’s (SARS) efforts to increase compliance and revenue collection.
1. Compliance revenue increase: SARS’ Compliance Programme generated R301.5 billion in revenue, a 15.8% year-on-year increase, accounting for 13% of gross revenue collections.
2. Data-driven insights: The use of artificial intelligence (AI) and data analytics has been instrumental in SARS’ compliance efforts, allowing the agency to access taxpayer information, including bank statements, without warning or consent.
3. Access to bank accounts: SARS can direct banks to withdraw funds from an account to settle a tax debt without the account holder’s consent, as upheld by court rulings.
4. Business rescue does not eliminate tax debt: A recent case demonstrates that opting for business rescue does not exempt companies from paying tax debts owed to SARS.
5. Individuals and businesses at risk: Both individuals and companies can have their bank accounts accessed by SARS to cover tax liabilities if they ignore letters of demand and calls from the revenue service.
6. Importance of compliance: Tax experts stress that taxpayers cannot ignore SARS and expect the problem to resolve itself, highlighting the need for prompt action and compliance to avoid costly consequences.
Overall, the article emphasises SARS’ increased efforts to enforce compliance and collect revenue, using advanced technology and legal measures to achieve its goals. Taxpayers are advised to prioritise compliance and respond promptly to SARS’ warnings to avoid financial penalties.
Reference:
https://businesstech.co.za/news/finance/819260/sars-coming-after-bank-accounts-in-south-africa
