What we know so far
The South African Revenue Service says artificial intelligence has helped it block more than R100-million in improper payouts, as it expands the technology across both enforcement and taxpayer services ahead of the 2026 filing season.
SARS Commissioner Dr Johnstone Makhubu set out the strategy at a media briefing in Pretoria on Thursday, where the revenue service previewed the filing season and the technologies it plans to deploy.
Makhubu said AI systems read data from multiple sources to guide compliance decisions, and that this had stopped funds that should not have been paid out from leaving the fiscus.
He stressed that the technology supports rather than replaces human judgement, with officials retaining the final say on enforcement action.
The filing season opens with auto-assessments from 1 July, and the AI push forms part of a wider modernisation of how SARS detects risk and serves taxpayers.
Why it matters
The strategy affects every individual and business that files a return in South Africa.
SARS collects the revenue that funds government operations, infrastructure and social grants, and the service reported record net collections of R2-trillion for the 2025/26 financial year.
Greater use of AI in compliance means the revenue service can cross-reference far more data than human auditors could review manually. That increases the chance that under-declared income or improper refund claims are flagged for review.
For compliant taxpayers, SARS is positioning the same technology as a route to faster, simpler service, with more pre-filled returns and quicker refunds.
The approach also raises questions about how personal financial data is used. SARS has sought to address these by saying its analytics operate within a governance framework and that humans make the final compliance decisions.
The briefing came under Makhubu, who took office as commissioner on 1 May 2026, succeeding Edward Kieswetter, as SARS pushes a broader overhaul of its systems.
Key details and figures
Makhubu said AI had helped stop in excess of R100-million in impermissible funds from being paid out, with algorithms drawing on several data sources to inform decisions.
SARS told technology publication TechCentral, which reported on the briefing, that its systems cross-check sources including bank statements, VAT returns and Companies and Intellectual Property Commission data to flag anomalies and misdeclarations.
The revenue service was emphatic that AI does not act on its own. Risk signals from its machine-learning models are passed to a case selection division, which applies established rules before any audit or investigation begins.
Marius Papenfus, SARS’s head of enterprise data management, described several models in use. One ranks cases by the probability and feasibility of collection.
Another predicts whether individuals should be registered for tax based on the economic activity flowing through their bank accounts, comparing this against the existing taxpayer register.
A third estimates how far taxpayers may have under-declared income, drawing on company-ownership data, government tender records and directorship links.
Deputy Commissioner Carl Scholtz said AI was also used extensively to match and clean third-party data from employers, banks and medical schemes, which feeds the accuracy of auto-assessments.
Scholtz said AI-assisted verification was in its third phase of internal testing, with some functions due to move into production over the next 12 months.
On the service side, SARS has deployed an AI assistant called Ask Lwazi on its website, alongside digital channels including WhatsApp, its mobile app and USSD.
Makhubu cited China’s tax authority, which he said uses AI to handle 80% of incoming call queries, as a benchmark SARS hopes to match. He also pointed to e-verification as a near-term target, describing AI agents that read submitted documents using optical character recognition.
“We are moving away from being an administrator to being a service provider,” Makhubu said.
The AI work sits within a broader overhaul that SARS calls Modernisation 3.0, which pairs AI-driven compliance with biometric taxpayer identities and a planned instant-payment system.
What happens next
The 2026 filing season opens with auto-assessments running from 1 July to 12 July, during which SARS expects to issue about six million automated assessments.
Non-provisional individual taxpayers can file from 13 July to 23 October 2026, while provisional taxpayers and trusts have until 22 January 2027.
SARS said taxpayers who are auto-assessed and agree with the outcome need take no action, and that refunds due will be paid within 72 hours where banking and contact details are in order.
Under the 2026 tax season rules gazetted by SARS, taxpayers earning below R500,000 a year from a single employer are not required to file a return, provided they meet the set conditions.
SARS said it had upgraded capacity to manage high volumes, including a virtual waiting room on eFiling and the MobiApp, and warned taxpayers to be alert to phishing scams that intensify around filing season.
Whether SARS can scale its automation ambitions while holding the line on human oversight of enforcement remains the open question, and one the service will be tested on as the season progresses.
Taxpayers who do not receive an auto-assessment notification by 12 July will need to file manually from 13 July.
