SARS is tightening enforcement by using third-party data and AI to close South Africa’s massive tax gap.
The South African Revenue Service (SARS) is ramping up enforcement of third-party data submission rules as part of its push toward a modern, data-driven tax system. This data helps SARS pre-populate tax returns, verify accuracy, and flag discrepancies that may signal underreporting or tax evasion.
According to PwC senior manager Adelheid Reyneke, compliance with these obligations is increasingly critical, as SARS now relies heavily on advanced analytics and artificial intelligence to detect risks. In some cases, penalties of up to 200% have been imposed for unexplained income.
The renewed focus is aimed at closing South Africa’s estimated R800 billion tax gap, easing pressure on government finances without raising tax rates. SARS now analyses bank transactions, unexplained credits, and even data from crypto trading platforms to assess tax liabilities.
Banks, insurers, medical schemes, trusts, estate agents, attorneys, and various businesses are required to submit detailed transactional data. Non-compliance may result in audits, heavy penalties, or criminal charges. Early compliance is strongly advised.
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