--- title: "Treasury and SARS leverage AI to improve efficiencies and outcomes" description: "At least two government departments are embracing the future by using artificial intelligence to improve efficiencies and deliver best outcomes." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "DATA-SMART" author: "Neesa Moodley" author_url: "https://www.dailymaverick.co.za/author/neesa-moodley/" canonical_url: "https://www.dailymaverick.co.za/article/2024-09-04-treasury-sars-leverage-ai-to-improve-efficiencies-and-outcomes/" published: "2024-09-04T11:29:03" updated: "2024-09-04T11:29:06" lang: "en-ZA" word_count: 662 --- # Treasury and SARS leverage AI to improve efficiencies and outcomes > At least two government departments are embracing the future by using artificial intelligence to improve efficiencies and deliver best outcomes. By Neesa Moodley · Published 4 September 2024, 13:29 SAST · Updated 4 September 2024, 13:29 SAST ## Key points - National Treasury has transformed from a modest setup with a few computers to a cutting-edge data lab, leveraging anonymised tax data to revolutionise policy-making and modelling, with Treasury director-general Duncan Pieterse highlighting the invaluable collaboration with academics in cleaning and standardising data, while SARS commissioner Edward Kieswetter advocates for a unique digital identity system to enhance government efficiency, showcasing the power of data-driven decision-making and AI in shaping the financial landscape. - National Treasury's data lab, which started with three computers and a few analysts in 2015, has grown into a fully-fledged facility with its own server capacity and academics collaborating with Treasury staff. - The lab uses anonymised tax data to inform policy work, allowing academics to assist in cleaning and standardising the data, providing valuable insights for government decision-making. - Recent research using data from the lab analyzed the impact of changes in the top marginal tax rate, revealing that such changes may not generate the expected revenue due to taxpayers' ability to manage their tax affairs. - SARS commissioner Edward Kieswetter advocates for a unique digital identity system to improve collaboration among government departments, citing the potential benefits in detecting fraudulent activities such as double dipping in social grants and tax refunds. ## Content From the humble beginnings of three computers and a couple of data analysts around 2015, National Treasury’s use of anonymised tax data to inform its modelling and policy work has burgeoned into a stand-alone data lab with its own server capacity, security and academics working alongside Treasury staff. Speaking at the Public Economics Conference on Tuesday, Treasury director-general Duncan Pieterse said one of the big benefits is that while accessing the anonymised data for academic purposes, the academics also help the government to clean and standardise the data. “The lab has gone from strength to strength over the years, and has been a global example of how a government can use administrative tax data to inform its modelling work and to inform its policy work. Today, the lab in the National Treasury houses anonymised tax data which academics and other government departments can access. For example, we have a panel of a sector of the labour market or taxpayers that we are able to track. That helps us think through the impacts of certain policy changes on taxpayers. There is also a company panel for corporates that helps us track corporate behaviour over time and allows us to make the kinds of assessments on our policy changes that weren’t possible before,” he explained. Most recently, Pieterse said, a research paper used the data from the data lab to assess changes of the top marginal tax rate on the wealthiest taxpayers. “We were looking at how these taxpayers would respond to changes in the top tax rate, and we could see, for example, that changing the rate would actually bring in a lot less revenue than you would anticipate – because of the way taxpayers are able to manage their tax affairs.” Speaking at the same conference session, SARS commissioner Edward Kieswetter said government departments working together could improve efficiencies significantly but it was an uphill battle. “Any collaboration in government is like pushing water up a hill. We don’t work well together, but there are things we can do to enable that collaboration. For example, we (SARS) are really advocating strongly for a unique digital identity for every citizen and business, so that, for example, we’ll be able to see if people are double dipping – by tapping into the social grant system while also getting a tax rebate refund,” he said. [YouTube video: "YouTube video"](https://www.youtube.com/watch?v=cIGq2M94jRI) However, Kieswetter acknowledged that this type of initiative would have to come from the office of the President. “A single digital identity system would strengthen the integrity of the entire financial system. Other countries have appointed a chief information officer or chief technology officer that sits in the office of the President.” Speaking at a Global Government Forum in July this year, Theo Blackwell, chief digital officer for the Greater London Authority under the mayor of London, said the London Office of Technology and Innovation (LOTI) was a good example of government using AI. ![SARS commissioner Edward Kieswetter during the swearing-in ceremony of the new national executive members at Cape Town International Convention Centre in Cape Town. 29 May 2024. (Photo: Gallo Images/Brenton Geach)](https://cdn.dailymaverick.co.za/i/e9FSCdgZSs-s2tlV7x7oKr-A_IE=/200x100/smart/filters:strip_exif\(\)/file/dailymaverick/wp-content/uploads/2024/09/Ed-.jpg) *SARS commissioner Edward Kieswetter during the swearing-in ceremony of the new national executive members at Cape Town International Convention Centre on 29 May 2024. (Photo: Gallo Images / Brenton Geach)* “LOTI works with methods, standards and real-world projects and problems that are identified by local authorities. That could be everything from plan\[ning\] electric vehicle charging, through to specific work on AI itself,” he said, adding that as far back as 2019, LOTI was looking at predictive analytics, working with the private sector to understand congestion emissions \[and\] road safety impacts. On how AI has improved efficiency, Kieswetter pointed out that in the current filing season, SARS has paid back R22.5-billion in refunds to about 2.6 million taxpayers to date. “That’s an average of over R8,000 per taxpayer, which is great for the economy because that has the multiplier effect as it gets back into spending.” In addition, SARS is now able to provide an assessment outcome in under seven seconds and has used AI to detect just more than R10-billion of impermissible refunds to date. **DM**