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1. MESSAGE FROM THE COMMISSIONER
The story of SARS is a story about people: everything we do is about improving the well-being and transforming the lives of South Africans, especially the most vulnerable among us. The South African Revenue Service has a legal mandate to collect taxes, improve compliance, and facilitate legitimate trade. We draw inspiration though, from a clear sense that SARS serves a higher purpose to “enable government to build a capable state, that fosters sustainable economic growth and social development, serving the well-being of all South Africans”. Since its establishment in 1997, SARS has been on a journey of continuous transformation and modernisation. The first phase of this modernisation was the consolidation of the separate departments of Inland Revenue, and Customs & Excise, into a single semi-autonomous agency outside of the public service, but within the public sector. In this phase the focus was to transform a previously inward, administrative orientation into a more taxpayer facing, service-oriented institution. During this phase, assessment centres, enforcement centres, contact centres along with frontline tax branches, customs branches, as well as the establishments respectively in land, air, and sea modalities, formed the physical footprint of SARS. The initial technology modernisation was focused on digitisation of a paper-based environment into digital artefacts, but largely still manual processing. The second phase of transformation focused on personal income taxes (PIT) followed by corporate income tax (CIT), value added tax (VAT) and Customs. The modernisation during this phase entailed mainly digitalisation with the introduction of e-Filing and some process automation - which effectively transformed physical experiences like registration, filing, and assessment into digital experiences. The third and current phase of transformation reviews the end-to- end administration architecture of PIT, CIT, VAT and Customs, and aim to include the balance of all minor taxes. Modernisation during this phase will go beyond the digitalisation of experiences and automation of processes.
Modernisation 3.0 will increasingly draw on advanced data science, artificial intelligence and agentic AI to create an intelligent administration platform on which routine tasks are automated; traditional functions like declaration filing will be disintermediated; and decisions will be informed by insights from data. In this phase of modernisation employees will seamlessly co-exist with AI Agents. Historically taxpayers submit declarations and supporting evidence to SARS, who then performs the reconciliation and settlement of a tax account for a defined period retrospectively. The aspiration globally, for tax and customs administrations, is to transition from this retrospective perspective to real-time assessment of the tax account, where traditional submission of a declaration is no longer required, and all the required information and supporting evidence are drawn from third party data sources. The OECD refers to this aspiration as Tax 3.0. In May 2024, the SARS Executive Committee (EXCO), along with a group of key executives, met to review progress since 2019, of the “Rebuilding of SARS” since the institution became a casualty of state capture. The session took stock of the SARS modernisation to date. A follow up session was conducted with the “Top 350” executives for further refinement and to establish a basis for broader alignment amongst leaders.
A key outcome of this comprehensive strategic review was a first draft of a new “SARS Digital Transformation Playbook”
Moving from each phase of modernisation to the next is not through a single discreet event, but transitions through a combination of incremental and disruptive innovations as permitted through various emerging enabling technologies.
SARS Modernisation White Paper 2025/26 – 2029/30
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