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IITPSA welcomes Sars’ moves to harness big data, AI for tax collection

2nd June 2021

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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The Institute of Information Technology Professionals South Africa (IITPSA) has welcomed plans by the South African Revenue Service (Sars) to use big data analytics and artificial intelligence (AI) to improve revenue collection and locate tax evaders.

IITPSA board member Moira de Roche welcomed the move, stating that it “should have been done years ago”, considering that the more efficiently Sars collects tax that is due, “the better off we will be as a country”.

She added that, generally, “it has been relatively easy for people to dodge tax before now, so it is a move in the right direction to start using all the data that exists across various government departments and deploying AI to identify trends and potential fraud”.

However, even though the technologies are mature, and all the necessary data exists, she believes implementing such a project could prove challenging, as South Africa has challenges in “cross pollinating and sharing data”.

IITPSA president Thabo Mashegoane also welcomed the news, noting that the IITPSA is confident that the information and communication technology sector has the solutions the government needs to overcome many of its challenges. 

“The necessary analytics and AI tools have long been mature enough to be entrusted with a task as important as tax revenue collection and fraud management,” he said.

IITPSA special interest group on AI and robotics chairperson Johan Steyn, meanwhile, expects to see advanced big data analytics platforms underpinned by machine learning technology to be the technological foundation for Sars.

“Cloud computing platforms can enable this. In addition, Intelligent Automation platforms for smart process automation is a key consideration, and the use of edge computing and smart sensors would support taxation validation on goods at ports of entry”.

He noted that in its report, titled ‘Advanced Analytics for Better Tax Administration’, the Organisation for Economic Cooperation and Development, highlights the issues that tax authorities face when implementing AI and advanced data analytics.

The report speaks to organisational culture considering the smart technology era, which Steyn said is an important point relevant to all organisations as the technology is often feared and misunderstood, especially by the executive leadership layer.

The report also speaks to the suitable use of advanced analytics data and the challenges around skills. Though, for Sars to successfully implement smart technology, Steyn suggested that the entity should first consider the business challenges and the change management around its people and processes.

“It should never be technology- or platform-first initiatives. They should also partner with suitable technology providers in outcome-based and risk-sharing programmes. The upskilling of workers and the transfer of intellectual property is essential,” he commented.

De Roche, however, noted that Sars “does appear to have a plan to source the necessary skills”, as the entity plans to employ “all the right people”.

Additionally, IITPSA noted that security and the protection of personal information will be of paramount importance in order to protect citizens’ personal data both from hackers and internal misuse.

Considering that cybersecurity will be a major issue, especially when they have data across banks and vehicle registrations, De Roche said this is also where ethics comes in, as “Sars wants to use people’s data for legal, honourable purposes, but it would not be ethical if they failed to take good care of that data”.

She urged the entity to protect this data with comprehensive internal and external security. 

“Topics like ethics and privacy are essential to the Smart technology era. Sars can use this technology to execute its mandate more efficiently. But with more data on individuals and corporations, it can also provide an opportunity for Sars employees to operate outside of their mandate,” Steyn added, noting that this may include the use of personal financial information, collected and analysed by AI agents, to criminal ends. 

“The protection of personal information is crucial. Sars’ data governance frameworks should be a key consideration on this journey. Malicious agents, be it corporate espionage or State-sponsored hackers, would be increasingly attracted to the data stored and used by Sars.”

Another important consideration is the taxation of international, platform-based companies who collect fees in South Africa but who are not taxed.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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