While the tax administration is undergoing significant digital transformation globally, the Office of the Tax Ombud (OTO) has highlighted the critical role of the Ombud in ensuring fairness, equality and accountability in the evolution of tax administration.
“As we look to the future, we must remember technology is a tool, not an end. A truly modern tax system is not only fast and efficient it is inclusive, transparent, and just,” Office of the Tax Ombud’s Acting CEO Mmamelao Malakalaka said on Monday.
Addressing the 12th Annual Tax Indaba in Johannesburg, Malakalaka said research shows while urban taxpayers may benefit from these advances, those in rural or underserved areas may struggle with internet connectivity, device access, or digital literacy.
“Also, this digital divide is not just about internet access it’s about the capacity to navigate, trust, and benefit from digital systems. The elderly, rural communities, low-income taxpayers, and small businesses may face barriers.
“As an institution mandated to safeguard taxpayer rights, the OTO must take proactive steps to ensure that digitisation does not come at the expense of fairness, transparency or access to justice,” the Acting CEO said.
She warned that as tax systems modernise; they bring both efficiency and new risks.
“While the South African Revenue Service (SARS) advances toward a more digitised, Artificial intelligence (AI) driven tax environment, fraudsters are also evolving, exploiting new loopholes in the system. Oversight bodies like the OTO must ensure that innovation does not come at the cost of taxpayer rights, transparency, or accountability.
“One major example is our current investigation into eFiling profile hijackings, a growing form of identity theft where fraudsters gain control of a taxpayer’s profile, change key details, and divert refunds,” Malakalaka said.
The OTO is currently investigating a number eFiling profile hijacking cases.
“The OTO is actively monitoring this matter, conducting investigations, collaborating with SARS and stakeholders, and has expanded its systemic investigation team to respond effectively to these emerging digital risks.
“Tax practitioners and taxpayers have reported to the OTO that the SARS eBooking system is frequently inaccessible due to errors, timeouts, or technical issues, and that there is limited availability of appointment slots.
“The OTO is listening closely to SARS’s response and … is committed to monitoring this situation. If improvements are not made, the OTO may consider opening a systemic investigation next year,” she said.
This demonstrates the OTO’s commitment to actively listening and addressing challenges to ensure digitisation does not create barriers to fairness and access.
“As part of the global Tax Administration 3.0 evolution, SARS and other tax authorities are exploring the use of AI technologies for audits and assessments. Tax practitioners have expressed concern about the potential for bias and error in AI algorithms. From experiences in banking and other sectors, we know that AI algorithms can sometimes be biased or incorrect.
“The OTO is aware of these risks and is preparing to oversee the use of AI within tax administration to ensure transparency and fairness are maintained,” Malakalaka said.
She emphasised that the evolution of tax administration in developed countries offers valuable lessons, but also serves as a cautionary tale.
“We must adopt best practices, adapt them to our unique context, and guard against the unintended consequences of digital transformation.
“We too are modernising and digitising our own complaint-handling systems, improving online access, and investing in data analytics to better detect systemic issues. But in doing so, we are determined not to create new barriers for taxpayers who may have limited digital access or skills.,” the Acting CEO said. –SAnews.gov.za
