(Photo: Stevepb/Pixabay)
Simon is a skilled and experienced truck driver. Today he takes the long way again with an important export load that he has to take across the border. He sighs deeply, because he knows what the congestion of trucks looks like at South African border posts.
Hold-ups, delays, lost time, frustration.
Imagine today things are different: The customs and excise process is easy and fast, Simon does not even have to get out of the truck to verify his identity, he does not need to open the cargo container for inspection and the truck in front of him is already through the border post thanks to the fact that the whole process is automated.
Automatic, smart and fast
This is how a smart checkpoint at border posts will work in the foreseeable future as part of the South African Revenue Service’s (SARS) Modernization Program 3.0, said Edward Kieswetter, outgoing SARS commissioner, during the recent announcement of the revenue collection for the past financial year.
A camera will automatically scan the truck’s registration number and immediately verify the vehicle’s identification confirming the necessary permission for the cargo and passengers, as well as highlighting any possible risks that would require intervention at the border post.
The next step is to scan a digital or smart seal or lock on the cargo container. The system makes sure that the seal matches the truck, what was declared and agreement with documentation. Then follows biometric verification where a camera validates the driver’s identity and passport permission. The entire vehicle is then scanned to check for any contraband, counterfeit goods or hidden compartments on board that could threaten national security.
Everything is in order, the trapdoor opens automatically and Simon drives through the border post. He immediately receives confirmation on his mobile phone, while his logistics manager, for example, who sits in Johannesburg, also receives real-time confirmation that the truck has passed through the border post without any delays.
Kieswetter said the modernization of the physical and technological infrastructure at border posts integrates the customs and excise administration on the modern tax administration platform.
Benefits of SARS’ modernization
SARS received an additional R7.5 billion over the medium term from 2025/2026 to 2027/2028 from the Treasury to accelerate its modernization strategy in order to improve tax collection.
Kieswetter said McKinsey statistics show that more than 72% of digital transformation projects fail worldwide. An estimated $2,100 billion has been spent which does not produce the necessary results.
“That’s why you need to have a clear goal and strategic intent when you embark on the digital transformation journey. This is how SARS has let it lead and its employees work with artificial intelligence (AI) and creative AI (known as Generative AI).
A successful modernization program will improve voluntary tax compliance, taxpayers’ experience and operational efficiency and contribute to a sustainable system in the long term.
(Archive photo: Canva)
Tax verification, routine tasks and automatic VAT assessments on the go
Louis le Roux of the SARS Innovation Incubator said in a video message during the announcement that the tax collector processes more than 1 million tax verifications every year.
Much of that depends on SARS’ ability to manually process supporting documents and data. In 70% of cases, changes are approved within 21 days, he said.
The modernization program involves the use of AI that will identify documents, extract relevant content and compare it with third-party information. Another example is that an AI agent sends automated messages, so that auditors do not have the burden of routine communication but can focus on complex areas with high value.
In the test phase, AI performed the full verification for certain risks – the tool received the documents provided by the taxpayer and identified and classified the appropriate supporting material needed to complete the case. The AI agent also extracted and validated the necessary content through comparisons with internal and external data.
Le Roux said the AI agent then recommended the right course of action on how to fully automate the decision or involve a human verifier.
A full year’s worth of verification cases were used to test the AI agent and in more than 87% of them, the AI employee complemented and agreed with the findings of the SARS verification and audit experts. Where there were differences, the system was further refined and improved.
In this test run, the AI tool verified more than 5 million supporting documents for tax purposes and secured an additional R1.2 billion in revenue thanks to the redeployment of experts whose hands were freed by the use of AI, he explained.
Also central to Modernization 3.0 is an intelligent case management system that will automate routine work, use a lot of data and harness AI to promote voluntary compliance. Well-trained robo-assistants already answer taxpayers’ queries very efficiently. Ultimately, the process will bring about the modernization of the VAT system, which will enable automatic assessments of VAT, Kieswetter said.
“Modernisation 3.0 builds on the impressive work of the SARS automated tax assessments that are sent out and which means that more than 6 million taxpayers do not have to do anything if they were satisfied with their automatic tax assessment. This is what the ideal world looks like in which tax transactions go without a hitch and taxes simply happen by themselves.”
