Is it legal to use AI for SARS and tax data in South Africa?

Is it legal to use AI for SARS and tax data? Yes, if you do it the right way. AI is genuinely good at summarising messy financials, checking reconciliations and drafting the routine parts of a submission. But tax records are some of the most sensitive information a business holds, so three sets of rules apply at once. Here is the plain version of what the law requires and how to use AI safely.

Is it legal to use AI for SARS data? The three sets of rules

The recognised controlling body rules were added to the Act by the Tax Administration Laws Amendment Act of 2012. SARS’s own page for tax practitioners describes controlling bodies as overseeing registration and managing their members’ compliance.

Why pasting a tax return into ChatGPT is risky

A return is a dossier of personal detail. Three things go wrong when it lands in a personal chatbot account.

• It is personal information under POPIA, so you need a lawful purpose, only the data you need, and reasonable security under section 19. Medical expenses and similar details are health information, which section 26 treats as special personal information with extra restrictions.
• It leaves South Africa. A US-based AI service processes data outside the country, which is a cross-border transfer under section 72, allowed only with adequate protection, consent or contractual necessity.
• It may be kept or used for training. OpenAI’s pricing page says content on consumer ChatGPT plans is used to train its models unless you opt out. That puts client data somewhere you cannot control.

What SARS says, and what it does not

There is a lot of confident nonsense online about this, so it is worth being precise. SARS’s page for tax practitioners does not mention AI tools, and we are not aware of any SARS rule that specifically permits or bans using them on client data. SARS’s secrecy duty in section 69 governs its own officials.

SARS is using AI itself. Its VAT Modernisation consultation paper, released on 17 August 2026 with comments due by 16 October 2026, describes embedding data science and artificial intelligence into VAT administration, with e-invoicing and e-reporting. That is about how SARS will receive data, not permission for you to put client data anywhere you like. Your obligations come from POPIA and your professional body, whatever a tool’s marketing says.

The compliant way to use AI on tax and financial data

1. Remove identifying details first. Under POPIA section 6, data de-identified so that it cannot be re-identified falls outside the Act. Masking you can reverse does not count. See how to anonymise data before using AI.
2. Or use a business plan with a data processing agreement. OpenAI says it does not train on ChatGPT Business, Enterprise or API data by default and signs a data processing agreement for them. Microsoft, Google and Anthropic make similar commitments for their work products; see POPIA-compliant AI tools.
3. Keep a processing record. Note which tools touch client data, why, and under which contract.
4. Have a person review every output. AI drafts; a qualified person checks and signs off.

A hypothetical example: a Johannesburg tax practice wants AI to explain a client’s unusual year-on-year income swings. It could export the figures with names, ID numbers and tax reference numbers removed, run the analysis in a business AI plan with training off, and let the practitioner check the explanation before anything goes to the client or to SARS.

For accountants and tax practitioners specifically

For a registered practitioner, confidentiality is part of your professional standing, not a nice-to-have. The Tax Administration Act requires your controlling body to maintain codes of ethics and conduct and disciplinary procedures, so a leak of client data can become a disciplinary matter as well as a POPIA one.

Practical guardrails for a practice:

• A written rule that identifiable client data never goes into a personal AI account.
• An anonymising habit for anything you run through a general AI tool.
• One approved business tool with a data processing agreement, rather than whatever each person prefers.
• A short processing record you could show a client or the Information Regulator.
• Human review on every output that informs a client’s filing or position.
• A breach plan: POPIA section 22 requires you to notify the Regulator and affected clients, and since 1 April 2025 the Regulator wants notifications through its eServices Portal.

For the day-to-day bookkeeping side, see AI for bookkeeping and VAT and accounting software in South Africa. For how practices are using AI more broadly, see AI for accountants in South Africa.

This is general information, not legal or tax advice. For a specific compliance decision, confirm with a POPIA practitioner or your recognised controlling body.