How trustworthy data and timely action boost tax compliance in Brazil

Every day, millions of tax transactions flow through Rio Grande do Sul, Brazil’s fourth-largest state economy. When compliance issues go undetected for months – or even years – the consequences can be significant: businesses accumulate tax liabilities, governments lose revenue and auditors spend valuable time investigating problems that could have been addressed much earlier.

Acting sooner to improve compliance

For the Secretaria da Fazenda do Rio Grande do Sul (SEFAZ-RS), the agency responsible for tax administration in Brazil’s southernmost state, changing that dynamic became a strategic priority. Rather than relying primarily on retrospective audits, the agency wanted to identify potential noncompliance while transactions were still fresh – giving taxpayers a chance to correct mistakes earlier and helping the state recover revenue sooner.

“Rio Grande do Sul’s main goals are to ensure tax compliance of our taxpayers and to promote the socioeconomic development of the state,” says César Tagliani Carneiro, Tax Auditor and Division Head, Data and Analytical Intelligence at SEFAZ-RS.

As one of Brazil’s leading tax authorities and a technology provider for electronic fiscal documents used by every Brazilian state, SEFAZ-RS also needed a solution that could support different tax rules, business scenarios and investigative use cases at scale – including near-real-time ingestion and validation of up to 7 million records per day.

Turning better data into faster decisions

To move from retrospective audits to more proactive compliance, SEFAZ-RS needed more than a new technology platform. It needed a new way for tax experts, data teams and IT professionals to work together around shared data and analytical models.

That vision led to the Data-Driven Revenue (Receita Orientada a Dados, or ROD) initiative, launched to strengthen the use of data and analytics across the institution. ROD is part of Brazil’s Fiscal Management Improvement Program (PROFISCO), supported by the Inter-American Development Bank (IDB), with a total investment of approximately US$180 million.

With SAS Viya as its central data and AI platform, SEFAZ-RS began building a stronger foundation for data intelligence – bringing AI, machine learning, business intelligence, investigation tools and data governance into a single ecosystem. That change prompted previously siloed teams to work together and improve how they detect risks, prioritize cases and act on insights.

According to Carneiro, ROD required a shift in how SEFAZ-RS viewed data. “The main initiative in bringing the data-driven culture to our work was to involve very strongly the business areas of our projects.”

Bringing tax and technology teams together

Rather than building isolated solutions for individual departments, the organization adopted a broader strategy. Cross-functional teams from business and technology worked together using agile delivery methods, ensuring tax experts remained closely involved throughout development.

SAS Partner Vert Analytics also played an important role in turning that strategy into working solutions. The consulting team brought project methodology, senior technical expertise and hands-on execution support, working alongside SEFAZ-RS across nearly every ROD initiative developed to date.

“The solutions were built together, not handed over from one team to another,” says Carneiro. “The adoption of data-driven technologies changed the way we work. Without a doubt, we have become more agile.”

Giving auditors a clearer view of risk

Today, the agency continuously analyzes electronic tax transactions as they occur instead of waiting months or years for traditional audits.

Potential irregularities are automatically detected, prioritized and made available to auditors through a single investigative workspace that combines alerts, related entities, historical information and visual analysis. That link analysis capability helps investigators see connections across more than 87 million entities and 421 million relationships – relationships that can be difficult to detect through standard transactional audits.

As part of its SAS Tax Compliance environment on SAS Viya, SEFAZ-RS uses SAS Intelligent Decisioning to process alerts and SAS Visual Investigator to deliver them in a single investigative workspace. There, auditors can prioritize cases by risk, use customized dashboards and select those requiring further investigation.

The SAS Viya platform also supports a wide range of AI capabilities. Machine learning helps identify potentially undervalued tax declarations, while natural language processing extracts information from legal documents. Generative AI is also helping SEFAZ-RS strengthen data governance by documenting data lineage and improving transparency across the organization’s data assets.

Auditors no longer have to manually gather information from multiple systems before beginning an investigation. An integrated dossier environment brings together 16 data sources and more than 30 dashboards, giving multiple areas of the State Revenue Service a consolidated view of the information they need.

“We now have data already integrated, prepared and presented in ways that meet auditors’ needs,” says Carneiro. “The work becomes much faster because the information is available immediately.”

Moving from reactive audits to proactive compliance

The shift from periodic analysis to continuous monitoring is already producing measurable operational and fiscal value for SEFAZ-RS.

Its Continuous Transaction Monitoring System processes more than 230,000 electronic invoice items and 1.2 million consumer e-invoice items every hour, generating alerts within five minutes of detecting potential irregularities.

In one monitoring initiative, SEFAZ-RS identified approximately $16 million in import invoice discrepancies in the first five months of operation. Across the broader ROD framework, the agency has more than $1 billion of yearly tax revenue being monitored in near real time by using high-volume processing and link analysis to detect patterns that traditional audits can miss.

Beyond the operational gains, that speed is helping SEFAZ-RS shift from reactive investigations toward more proactive compliance.

“We used to audit up to five years of accumulated company transactions. Now, with near-real-time control, we can identify potential noncompliance much closer to the taxable event,” says Ronaldo Aparecido de Oliveira, Tax Auditor and Head of Data Governance at SEFAZ-RS. “That gives taxpayers an opportunity to correct errors earlier, helping reduce tax liabilities, improve compliance and lower the risk of revenue loss for the state.”