SARS is undergoing a significant transformation through the implementation of automated tax assessments based on artificial intelligence. This article examines the implications of these changes for taxpayers, including the advantages and potential risks of using automated systems.
The rapid increase in the number of automated assessments is an obvious sign of SARS's shift towards a more data-driven, automated tax administration model. Instead of waiting for each individual taxpayer to file a return, SARS increasingly uses third-party data to pre-calculate the taxpayer's position. For many employed individuals with relatively simple affairs, the result is an assessment that is fully or predominantly ready at the start of the filing season.
The scale of this program is rapidly expanding. In the 2025 tax filing season, SARS reported that 5.8 million taxpayers received automated assessments, up from 5 million in 2024. Furthermore, it was noted that 99.6% of automated assessments were not amended by taxpayers, and refunds totaling R10.6 billion were paid within 72 hours. These figures indicate that automated assessments have moved beyond being a secondary convenience and have become a central operational model for a significant portion of the personal income tax base.
SARS aims to pre-fill data for approximately 6 million taxpayers annually, including those required to submit simple provisional returns. For SARS itself, the importance of automated assessments extends beyond mere taxpayer convenience. They reduce friction in the filing process and decrease the volume of manual returns requiring processing. From an enforcement perspective, automated assessments allow SARS to focus its resources on auditing and ensuring compliance in cases of higher risk or greater complexity. Automated assessments also support SARS's broader goal of 'making taxes happen automatically.'
Automated assessments (and pre-filled returns) are largely based on information that SARS can reliably obtain from third parties. This information typically includes employment income and Pay As You Earn (PAYE) reflected in IRP5 or IT3(a) certificates, as well as interest and investment income reported by financial institutions, contributions to medical schemes and tax credits, and pension contribution data.
In practice, the system works most effectively where the taxpayer's income and deductions are visible through institutional reporting and where there are no additional income sources or complex claims that SARS cannot verify independently. However, this limitation is important: automated assessments do not mean that SARS always has the complete picture of every taxpayer's affairs. Rental income, freelance or business income, foreign income, certain capital gains, cryptocurrency transactions, out-of-pocket medical expenses, Section 18A donations, home office expenses, and other specific deductions may not be reflected if they are not submitted through the appropriate channels or added by the taxpayer. Consequently, taxpayers remain responsible for verifying the assessment and submitting an amended return if SARS's calculation is incomplete.
SARS prefers third-party data because it is generally more reliable than self-declared information provided only at the end of the filing process. The appeal for SARS lies in both administrative and strategic aspects. Administratively, third-party data reduces manual collection, decreases processing time, facilitates faster refunds, and lowers the number of routine queries. Strategically, it gives SARS a clearer view of the tax base, which consequently reduces tax evasion.
Undoubtedly, SARS will leverage AI-generated taxpayer interactions. This step is already visible in SARS's digital service channels, including the SARS website, the Sars MobiApp mobile application, the online query system, the WhatsApp channel, and the Lwazi AI assistant. It can be expected that SARS will generate a higher level of automated letters regarding audits, checks, and other requests for information, instead of notifications based on personal intervention.
Automation is remarkable where it functions. The SARS e-filing system is one of the world's most advanced electronic tax compliance systems. The work required for simple tax returns relieves the burden on both SARS and taxpayers. Freedom from the burden of annual tax returns will be a blessing for many.
However, caution must be exercised against over-reliance on automation to the exclusion of human involvement. Automation does not mean a complete abandonment of humans. Human oversight remains necessary for proper verification. Blindly accepting automated figures can lead to unnecessary costs when taxpayers forgo available deductions and other tax relief measures. Correcting erroneous pre-filled electronic information can easily turn into a nightmare. While automation can sharply reduce the need for information at the filing stage, taxpayers may face a barrage of automated audit requests and other interventions from SARS that could prove far more intrusive. The game is far from over.
