Public sector 1

Six years ago, the South African Revenue Service (SARS) was a casualty of state capture. Today, it collects R2.01 trillion, auto-assesses millions of taxpayers and has AI agents handling tax verifications end-to- end. Modernisation 3.0 is the next phase, and it is more ambitious than anything that came before it. “This is not a technology exercise,” says former commissioner Edward Kieswetter. “This is a leadership exercise. The technology agents build what leadership dreams about.”

To understand where 3.0 is going, it helps to know where SARS has been. Modernisation 1.0 digitised a paper-based system, while Modernisation 2.0 moved processes online, pre-populated returns and auto-assessments, eliminating the need for 5.8 million individual taxpayers to file a return at all. For those who do file, assessments arrive in under five seconds and refunds clear in under 72 hours for almost 90% of taxpayers. Modernisation 3.0 goes further still, shifting from a system that waits for declarations to one that anticipates compliance, draws on structured and unstructured data in real-time and increasingly does not need the taxpayer to initiate anything. It is not an isolated technology upgrade, but a fundamental rethink of how a revenue authority relates to the people and economy it serves. “The world has changed,” says Kieswetter. “In the last five years, we have seen the emergence of a new suite of technologies, from traditional AI, increasingly now experiencing generative AI, which allows us to create AI agents and, of course, beyond that, creating AI agents to work alongside our staff.”