NOMPU SIZIBA: The South African Revenue Service launched the 2021 tax-filing season today [July 1]. Owing to the pandemic and the continued acceleration in the number of Covid-19 infections, no branch filings will be allowed for now, But of course taxpayers can file online and use the Sars mobi app in the meantime. Well, to tell us more around what we can expect from this filing season, I’m joined on the line by Sars Commissioner Edward Kieswetter.
Thanks very much for joining us, Commissioner. The tax filing season has kicked off in earnest today but, owing to the pandemic, no branch filings are allowed for now. So tell us the key elements in terms of how taxpayers can file, especially as it pertains to our current pandemic context and the timeline.
EDWARD KIESWETTER: Nompu, we have worked very hard to expand our offering, so theoretically there is no need for a taxpayer to come into our branch to fulfil any of the obligations, whether that is to register the taxpayer, to submit a return, or to make a payment or receive a refund. Everything can be done on our digital platforms.
To facilitate that we are always mindful that there’s a sector of the population who may not have smartphones or so-called smart devices. They have normal mobile phones. We have therefore also introduced an SMS facility for them to communicate with us. The SMS will allow them to send us a key word and their ID number. They can request their tax number. They can request a statement of account. They can request an e-booking with us.
We’ve really worked hard to expand the modes whereby taxpayers can interact with us so that it is literally possible for every function that they require to be done without coming to a physical branch.
Now that’s driven by two things. Firstly, in response to the significant threat of transmitting and spreading the virus – and we know that the Delta variant falls smack bang in the middle of the third wave, and the Delta variant is significantly more transmissible – in sympathy with that we felt we would protect our own staff, we would protect taxpayers by closing our branches. However, by still facilitating the fulfilment of all the obligations.
The second thing we have done is – and again this is made possible by the extensive use of third-party data – I announced today that we have over 132 million unique demographics. That’s information about a particular taxpayer that is equivalent to two terabytes of data – that’s 10 to the power of 12 – two terabytes of data that we use to do an assessment on behalf of a taxpayer, without them having to do anything. So over three million taxpayers will qualify for that. It means they will receive an assessment outcome by us. They will be able to review it and, if they agree with it, they simply press “transmit” or “submit”. In less than five minutes, which includes logging on, reviewing and submitting, the job is done for them.
For those who want to edit or adjust the information because they have information that we don’t have, or they believe so, yes, we have also increased the functionality. So this year we will not just, as last year, give you the outcome. We’ll also give you the actual statement, your assessment statement, so that you can see the fields we have filled in, the information we have used that brings us to the result. If you feel any of those fields is incorrect, you can edit it, provided you give us the substantiating information and you update your return and submit it again. That shouldn’t take long.
So for more than three million taxpayers we have introduced this functionality. We really are working towards creating an environment where for most taxpayers who have a standard income structure, the fulfilment of the obligation is a seamless experience.
NOMPU SIZIBA: Now I see that Sars staff are going to be in a position to help those who need assistance with online filing to do so telephonically. Is there a certain number that the taxpayer will have to dial? Would it be toll-free? How would that work?
EDWARD KIESWETTER: If they send the SMS to us, there’s no cost to them for the SMS. They can merely SMS us. They can get a call back from us or, if they have access to data they can simply log on. In an absolute necessity we will, once we open our branches – but on an appointment basis only – allow taxpayers to come to our branches. But even there, we will try and terminate the visit while you are still standing in the queue, which means we’ll come up to you, we’ll say, “Good morning, what is the purpose for your visit?” You’ll say, “Well, I’m here to check the status of my income tax return.” We’ll put in your number. And if you were selected for assessment, our frontline staff will have a device in their hand and say, “Oh, we have good news for you, you’ve already been assessed. This is the outcome. If you’re happy, press ENTER”. And we terminate the visit right there.
Last year we converted over 450 000 taxpayers in our branches to digital platforms.
NOMPU SIZIBA: Commissioner, just in terms of when you’re going to be opening branches, do you have a specific date or is that a moving target, depending on the situation?
EDWARD KIESWETTER: We’ve given an indication that at least for the next six weeks, judging when this wave will subside to be of a low enough level that the risk is manageable. We’ve given ourselves a window of six weeks, looking at the past waves. But probably after week four we will reassess the situation and either extend it or make another announcement.
But we will continue to work with taxpayers to help them, to coach them, in order that no one is left behind. We are living and really demonstrating, Nompu, 4IR in practice.
NOMPU SIZIBA: Absolutely.
EDWARD KIESWETTER: We are developing a modern Sars that uses the interplay between human effort augmented by artificial intelligence that is data and technology driven.
NOMPU SIZIBA: What does that then do to Sars in terms of your need for staff? Obviously you have highly technical staff, but does this have an adverse effect for staff who are more manual workers?
EDWARD KIESWETTER: Let me give you a few examples where we, over time, will downscale, and where we will increase.
A lot of repetitive administrative work – data capturing, updating records – is currently being done by people. As our data becomes more perfect and we find our machine-learning algorithms, a lot of the repetitive work can be disintermediated and be done.
If you think about what I just shared with you – the over two terabytes of data – it is humanly impossible for people to work through that, to look for trends, to look for risks. Increasingly that repetitive work, data-capturing work, will be disintermediated, repetitive work will be automated and knowledge work will be augmented.
An example of that is we won’t wait until our staff become irrelevant or redundant. We will continually repurpose them. Just in this past year we have taken 250 of our frontline staff who traditionally would have been involved in low-value administrative work, and we have up-skilled them to do basic compliance work. Many of them will go beyond that. And some of them will become verifiers of auditors and we will migrate our workforce towards more value-adding work and away from low administrative repetitive work.
Also, we have a huge deficiency in technical areas of investigation and audit, and where else better to start than growing your own timber? So that’s the trend on which we are building a smart modern size.
NOMPU SIZIBA: Now Commissioner, you’ve mentioned that you’ve invested a fair bit in things like technology to help track evaders of tax, among other things. Any message to those who may be tempted to duck and dive during this tax season?
EDWARD KIESWETTER: A very clear message to them. The use of data and technology, I must emphasise, Nompu, is firstly to give honest taxpayers like you a seamless experience. But, at the same time, the same technology and data improves our capability to detect and respond to non-compliance. And so for example we were able to prevent R5 billion of fraudulent refunds to individuals – in total we stopped over R50 billion of refunds last year through this work.
We have discovered over 26 000 individuals who have economic activity in excess of R1 million, but were not registered. We have identified initially over 275 taxpayers who have financial assets offshore; that’s off a base of a few hundred thousand taxpayers who fall in that category. So increasingly the ability to find you will improve, and the message to those taxpayers is you can continue to dodge us, but you do so increasingly at your peril.
NOMPU SIZIBA: One last thing, commissioner – are you compliant at SARS with Popia, since you’re dealing with two terabytes of data?
EDWARD KIESWETTER: Touch wood, obviously Sars has to honour all of the regulatory requirements for our work. Actually the highest bar that we have is taxpayer confidentiality. And so yes, we build an islanded ocean of data that is well-protected, and we manage access to that data through very strict protocols. For example, even as the commissioner, I am not authorised to go and look up a tax payer’s information. I don’t want that authority because I don’t need that authority. So very strict protocols and access to that information.
But cybersecurity is not a one-day journey. It is an ongoing effort to improve; the crooks are always one step ahead of us. So we will not rest. And especially as we move some of our functionalities and data storage into the cloud, as is part of a modern trend, we can’t ignore that. We absolutely have to remain diligent, hyper-diligent, in order to ensure that we can honour the protection of personal information that taxpayers are entitled to in law.
NOMPU SIZIBA: That was Edward Kieswetter, the Sars commissioner.