The South African Tax Institute says the use of artificial intelligence (AI) by the South African Revenue Service (SARS) is impacting taxpayers’ rights.
Gert van Heerden, Head of Tax Practitioner Relations and Support, spoke at the 11th International Conference on Taxpayer Rights in Pretoria.
Tax authorities around the world are adopting digitalization through the use of AI to improve revenue collection and efficiency, while preserving taxpayer rights.
Thursday’s proceedings considered how tax authorities are addressing the challenges posed by advanced technology and the impact on taxpayers’ privacy rights and confidence in the tax system.
Van Heerden said SARS relies heavily on AI for revenue purposes, creating an imbalance between proprietary models and taxpayers using free models that are outdated and not built for the tax code.
“One of the problems we see in practice is third-party data. If you don’t know what third-party data is being filed on your behalf, it’s no longer the tax professional submitting the information, it’s the third-party submitting the information, and the moment you determine that the information is incorrect, the taxpayer can decide what that third-party information is. And when it comes to car appraisals, it becomes even more difficult because when people do car appraisals, they think, “It’s simple, they’ll agree, but it’s not that simple.”
SARS’ AI assistant, Rwazi, is intended to provide basic guidance, but the onus is on the taxpayer to ensure that the information is correct.
“When SARS releases information or interpretive notes or guidelines, they usually take responsibility for it. When it comes to Rwazi, it is your responsibility as a taxpayer and it is not SARS’s responsibility to make sure the information is correct. Again, hiring a medical practitioner is always the best option,” Van Heerden added.
Van Heerden says that in the absence of a framework or policy, there is a need to balance the use of AI with tax rights. He said SARS is currently in the process of finalizing the policy.
“We need to know exactly how they’re spending it, what they have left in their balance. We understand the need to collect revenue and the need to deal with sketchy taxpayers. But for the vast majority of us taxpayers, all we want is a fair balance and to know what’s going on and transparency,” Van Heerden explains.
