Peru Fights Fraud Using SAS

Tax compliance has a direct and significant impact on Peru’s economic and social development, so when the Superintendencia Nacional de Administración Tributaria (SUNAT), the Peruvian government tax collections authority, decided to crack down on customs fraud and tax evasion, it needed the best data mining solution in the industry.

During a three-month evaluation process, SUNAT looked at solutions from SAS, IBM, SPSS and Computer Associates. Criteria included compatibility with existing systems, number of usable algorithms, speed of managing large volumes of data, as well as value proposition. “SAS ranked the highest in each area,” says Ruth Salcedo, SUNAT’s IT division manager.

"The idea to improve results using data mining came at the same time as we merged the tax and customs divisions," says Salcedo. “By processing both domestic and international information, we could generate a complete profile of taxpayers and foreign businesses. SUNAT’s first project with SAS involved generating profiles of tax evaders and of undervalued imported goods.” The SAS solution was implemented in six months. Future applications at SUNAT will include exports, accounting and taxation. "With the opportunity to obtain historical data from the tax and customs administration, SUNAT looked for new solutions to better detect fraud. The result was SAS’ advanced offering," says Virgilio Cachay Montalván. As SUNAT’s IT development analyst, Montalván is responsible for the application of neural networks in customs control.

SUNAT is the first tax and customs organization in Latin America to successfully use data mining in the fight against customs fraud and contraband. For its business and technology accomplishments, SUNAT received an award in 2004 from the Peruvian IT community. SUNAT is ranked among the top 100 IT organizations in Latin America.

"While the challenges facing Latin American governments vary from country to country, their common objective is to serve their citizens in the most effective and efficient way possible. SAS provides these organizations with unparalleled experience and vision, enabling them to serve their nations by achieving specific goals," says John Jurkin, director of the public sector and Andean region for SAS Latin America. "Congratulations to SUNAT for the 14 percent reduction in customs fraud and tax evasion. SAS is proud to have helped deliver the associated benefit to the Peruvian economy."