The SA Revenue Service (Sars) is looking to double its staff complement in the area focusing on enforcing disclosures of crypto asset transactions as part of its wider push to rake in billions of rand said to be owed to the fiscus across the economy by errant taxpayers.
The agency told Business Day that it was scrutinising offshore investments being made in this area and is working with the Reserve Bank in this regard, while also mining crypto data to identify high-risk material transactions and noncompliance.
Sars has also prioritised encouraging crypto traders to take advantage of the agency’s voluntary disclosure programme.
“In addition, we have raised audit assessments (almost R2bn) and notified those taxpayers who incorrectly calculated gains or used a capital gains tax calculation when they have in fact been trading,” the agency said.
“We have also set up a dedicated inbox and have received feedback from almost 2,000 taxpayers who want to be compliant and have shared their exchange documentation with us to correctly calculate their liabilities. Information received from the local exchanges has enabled us to do third party matching.”
The agency said it was reconciling return data to discern improvement in compliance. “Previously only 17,000 taxpayers disclosed crypto on their returns yet we are aware that there are 5.8-million crypto holders in SA.”
Tax attorneys have seen Sars take a harder line as it chases more than R500bn in unpaid taxes. Geo Kilian, tax attorney at Hobbs Sinclair Advisory, said the tax agency was increasingly outsourcing tough cases and using AI to spot noncompliance.
“We’re seeing a definite shift in tone,” said Kilian. “Sars is moving away from leniency towards a far more assertive posture. If you’re deliberately avoiding your obligations, expect to face judgments, asset seizures and personal liability.”
Kilian added that the agency was deploying technology effectively. “Sars is no longer just a reactive collector. With AI-driven insights, it’s moving towards proactive detection. That’s a game changer for compliance.”
Business Day reported in June that Sars is on the hunt for cutting-edge AI technology to improve its efficiency. The tax agency has gone to market looking to procure AI capabilities that would enable it to “replicate and automate complex, human-logic decision-making processes across its operations”.
This is as Sars said it aimed to use AI in automating an administrative decision-making process that involved the submission of reasons and supporting documents by individuals seeking an outcome.
In the past year, the agency secured more than 3,000 writs of execution and about 66,000 civil judgment against errant taxpayers.
The agency said it was continuing to harness its capacity to make it hard and costly for those who have opted to be non-compliant.
“It needs to be emphasised that Sars is applying all resources at its disposal including the latest technology to not only deter noncompliance but to make it clear that all taxpayers must shoulder their share,” a spokesperson of the agency said.
“Sars refers matters to a court process only as a last resort or when a taxpayer chooses to litigate ... where taxpayers wilfully engage in noncompliance, we are lawfully bound to make such noncompliance hard and costly.”
The National Treasury has allocated R7.5bn in the medium term to Sars, with about R3bn allocated to technological upgrades, as the agency sought to use advanced data analytics and AI to detect tax-compliance risks, “close the tax gap and improve overall compliance rates”.
Sars has already begun deploying AI, an activity it is now trying to scale as demands on the fiscus increase. It used AI and data analytics to recover R89.3bn from 26-million taxpayers in the 2022/23 financial year.
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