The world has embraced technology and Artificial Intelligence in a massive way.
It is almost impossible to do anything in life without having ‘something’ in the background collecting and interpreting data. This data is used in a multitude of ways but, with most things in life, the goal is to make money.
In previous posts we have highlighted the benefits of machine learning and how it has improved how businesses function. By implementing programs such as Sage One and Xero, a large portion of the bookkeeping function is automated. Reducing time spent by accountants and entrepreneurs doing basic monthly accounting.
In a future post we will be addressing how this information is processed and how it is required to be protected to align with the POPI Act.
For now, we will address:
How SARS is going to use machine learning to expose taxpayers who are cheating the system.
SARS is going all in on machine learning.
This was made clear when the Finance Minister announced an allocation of R3 billion to SARS for money collection, during the last budget speech.
I hear you asking all the right questions already:
“What is machine learning?”, “How will SARS use it?” and most importantly “How does it affect me?”
Machine learning is a branch of Artificial Intelligence (AI)
- A large amount of data and results is fed into the system.
- The system then examines the data and deciphers how the data is interpreted into the results.
- It then used this learned knowledge and applies it to all the data it receives.
SARS has been feeding this “engine” slowly over the years to help it learn & grow, and while it has been learning, SARS has ensured it expands its database.
SARS is linking up with every third-party data stream it can.
They have linked up with:
- CIPC
- Banks
- Employers
- Medical aids
- Retirement funds,
- The department of motor vehicles
- Even foreign tax authorities.
The list will just keep growing.
How will it affect me?
When the time comes for you to submit your annual tax return, the first thing SARS does is to prepopulate the online form with the information it has received during the year.
Not only does this assist taxpayers to easily submit their tax returns, but also limits errors and some negligence.
The Artificial Intelligence kicks in the minute you submit the return. It takes all the information and compares it against all the data it possesses and determines if the data agrees to the result.
If it determines that something is wrong, then it will start to flag SARS to these issues. Things that may never have been known to SARS before, and with only extensive manpower could ever be discovered, are now available at the click of a button.
For example:
If your tax return shows you are just surviving but the department of motor vehicles shows you purchased a luxury vehicle, SARS will pick this up and start asking questions.
Overseas banks and tax authorities are also sharing information,
so no more thinking SARS does not know about your bank account in another country.
This will not only affect individuals but also businesses, as the system will be used to ensure business are compliant with all tax types.
The CIPC link means that SARS can easily start linking the owners to companies and should one get flagged, the system will also start digging into the other to check for any other red flags.
Now is the time to ensure your tax affairs are accurate and above board with even less chance of things slipping past SARS unnoticed. Even though times are changing, there is no substitute for knowledge and experience and the TLOK team have over 30 Years’ experience in accounting and tax.
Our team is ready to assist you in every way possible to ensure you remain in the good books with SARS.