Sars already knows more about offshore income than expats think

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JEREMY MAGGS: South Africans living abroad have long assumed that if the South African Revenue Service (Sars) hasn’t called, everything is fine. But new analysis argues that silence no longer means safety.

With global data sharing, artificial intelligence and offshore reporting now entrenched, the tax authorities may already know far more than many expats realise.

Read:
South African expats: How will Sars find you? [2024]
Budget shows SA expats remain top priority for Sars [2022]
Tax man getting stricter with people working abroad [2022]

I want to discuss this in a little more detail. I’m in conversation with Roxanna Naidoo, head of global strategy at Latita Africa, to look at what this year’s budget really means for South Africans offshore, and where the link is, where the interconnectedness is.

Roxanna, a very warm welcome to you. You say that Sars “already knows” about offshore income. How confident should expats be that this is fact and maybe not just fear-based messaging?

ROXANNA NAIDOO: Thank you so much for having me, Jeremy. That is definitely a good question. For many taxpayers, the idea that Sars already knows, it still feels abstract.

In reality, Sars has spent the last few years quietly strengthening how it receives and uses third-party data, both locally and internationally.

As much as I say they’ve been quietly doing this, they have been very vocal in their previous media statements, even late last year, in advising taxpayers that they are enforcing collections through increased AI integrations.

South Africa participates in the global information-sharing framework that requires foreign banks, investment platforms and financial institutions to report account information linked to South African tax residents. That includes details such as account balances, interest earned and, in some cases, even investment income.

So this budget speech, what we expect in 2026, is to reinforce it, but it’s not a new power. It’s clear that it’s a signal from Sars that they are confident in the existing visibility they have.

The shift is subtle, but it’s important. Sars no longer waits for a tax return to tell the story. The return is now checked against data that’s already existing.

So for taxpayers, that means the risk is no longer about being found, but about whether what they’ve filed matches what Sars already has on their side.

JEREMY MAGGS: Could I ask you, Roxanna, how accurate third-party offshore data is in practice? And what happens if that data is wrong or even incomplete?

ROXANNA NAIDOO: That data, again, because it’s driven by AI capabilities and enhanced digitalisation, there is accuracy there because it’s not done by human error.

Read:
Sars Modernisation 3.0 – compliance crackdown in the age of AI [2026]
AI powers Sars efficiencies, says Kieswetter at G20 Zimbali meet [2025]

We can ensure that those numbers are correct. Those enhanced capabilities are basically ensuring that there’s no longer going to be errors in the financial accuracy that we are receiving from abroad.

JEREMY MAGGS: You mentioned a little earlier that Sars is quietly strengthening its capability. In your opinion, is this genuine new enforcement muscle, or is Sars just getting better at the tools that it’s had at its disposal for years?

ROXANNA NAIDOO: I think it’s both. I think it is genuine enforcement, but at the same time, there are new tools on a daily basis that are currently being included into Sars’s collection measures.

A good example of that was the recent media release by Sars at the end of last year, on 12 November, where the minister (Enoch Godongwana) said that the revised budget net revenue estimate was around R2 billion.

In that Sars release on 12 November, Sars said that they are pioneering a tax administration 3.0. That’s a modernisation strategy focused on developing a smart, digitally integrated platform powered by advanced data science.

This approach encompasses eight general projects, but I just want to touch on two, the most important for this conversation.

Read: Sars compliance programme secures more than R300bn in collections [2025]

The first one was the upskilling of employees to remain relevant in a future world of work in an era of artificial intelligence. The second one was the modernising of a case management platform that’s more intelligent, embedded in data science and artificial intelligence. Those were the exact words.

This is on the Sars website. This is the release that was on 12 November. So we can see again that Sars has been subtly advising the public that they are moving towards this digitalised era.

JEREMY MAGGS: You argue, Roxanna, that data is not disclosure, it’s now the starting point. Does that fundamentally change a taxpayer’s legal position, or just the balance of power?

ROXANNA NAIDOO: Yes. So where expatriates treat physical immigration as the starting point, they often leave unresolved exposures behind, so we regularly see cases where individuals believe they have exited the tax net, only to face questions years later about historic global income.

The budget speech is likely to reinforce that moving of assets or changing banking arrangements, that it does not, on its own, end their tax liability.

This approach mirrors international norms. Tax authorities globally are increasingly substance-driven, particularly where cross-border income and residency are concerned.

 JEREMY MAGGS: Roxanna, what about compliant expatriates? Is there a danger, is there a risk, of them being caught up in automated enforcement errors driven, as you’ve told me earlier, by AI and analytics?

ROXANNA NAIDOO: Yes. They might believe they are compliant right now, but should further evidence or data prove otherwise, then yes, because Sars regularly reviews historical positions using new and newly reconciled data.

Read:
Foreign properties now in Sars’s sights [Dec 2025]
Faster audits, but a tougher Sars [Nov 2025]
Foreign pensions now under attack from Sars [Mar 2025]

If a taxpayer assumed that they were a non-resident by continuing to file inconsistently or failed declarations, or if they believed those declarations were true at the time, Sars can and does raise questions years later.

The risk is not the time passing. The risk is unresolved inconsistency. This is why taxpayers should not confuse “nothing has happened yet” with “everything is fine”.

JEREMY MAGGS: It’s a very wide and open question but is financial emigration, against the backdrop of what you’ve just told me, actually still worth pursuing?

ROXANNA NAIDOO: Absolutely. At the end of the day, that’s what we need in order for us to finalise the process.

Many taxpayers believe that once they’ve physically moved, changed their banking details or moved money offshore, they’ve exited the South African tax system. That was never strictly true, and it’s even less true today.

Tax liability is determined by tax residency. That’s where financial emigration comes in. You have to cease your residency. It’s not where your money sits or how your bank account is labelled.

Financial emigration is an administrative step that relies on Sars first being satisfied with your tax position and residency status.

Read/listen:
Tax relief options can help South African expats protect their foreign-earned income [2025]
Navigating financial emigration and changing your tax residency [2024]

What we anticipate, again, is that the 2026 budget speech will continue to reinforce this. It’s substance over form at this time. Sars is far more concerned with where you live, work and earn, and maintain economic ties, than with whether you have simply ceased to earn income in South Africa.

JEREMY MAGGS: I am going to leave it there with my appreciation and thanks. Roxanna Naidoo, head of global strategy at Latita Africa. Thank you very much indeed.

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