AI in Accounting: Regulatory Implications and SARS Modernisation

Posted 03 September 2025 Written by Acts Online
Category Tax

Brought to you by SA Accounting Academy: In terms of the Tax Administration Act, No. 28 of 2011, the South African Revenue Service (SARS) has implemented AI-driven risk models that have generated R103 billion in additional compliance revenue.

The integration of AI into the regulatory environment is further evidenced by the VAT Modernization Program, which is scheduled for full implementation by 2028. This program will facilitate real-time data exchange and automated cross-referencing between SARS, the Companies and Intellectual Property Commission (CIPC) (established under the Companies Act, No. 71 of 2008), the Master’s Office, and the Department of Home Affairs. This creates a transparent oversight environment where inconsistencies across different state databases are automatically flagged.

Under the Financial Intelligence Centre Act, No. 38 of 2001, the Financial Intelligence Centre (FIC) is employing sophisticated algorithms to monitor suspicious transactions and identify high-risk entities. Accounting professionals must ensure that their internal compliance workflows are capable of meeting the demands of these automated oversight systems.

Professional Liability and Data Privacy

The adoption of AI tools introduces significant risks under the Protection of Personal Information Act, No. 4 of 2013 (POPIA). The use of free, public AI services for processing client data may constitute a data breach, as information entered into these models is typically harvested for training purposes. Furthermore, practitioners are reminded that professional liability remains personal; the “AI did it” defense is insufficient for reports, tax returns, or financial statements submitted under a professional signature.

To maintain compliance, accounting practices should implement AI governance frameworks covering:

  • Data privacy protocols and the prohibition of public AI tools for confidential client work;
  • Mandatory human-in-the-loop verification for all AI-generated outputs; and
  • The alignment of internal systems with SARS’s direct e-filing and real-time data integration requirements.

What this means for you, your business, or your clients

  • For yourself: You must personally verify the accuracy of all AI-generated tax and financial data before signing off, as professional liability for errors cannot be delegated to an algorithm.
  • For your business: Your firm must implement a formal AI policy that explicitly prohibits the use of free AI tools for client-related tasks to avoid breaches of the Protection of Personal Information Act.
  • For your clients: Advise clients that SARS is moving toward a “goldfish bowl” environment where data from the CIPC and other agencies is cross-referenced in real-time, making consistency across all filings mandatory.

Originally published at https://accountingacademy.co.za/news/read/rebooting-accounting-with-ai-are-you-ready-for-the-revolution-in-2025

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