A new bill from National Treasury could soon give the Financial Intelligence Centre (FIC) the power to conduct lifestyle audits on South African citizens. This comes as a significant development, as the South African Revenue Service (SARS) already uses similar audits to ensure that people’s lifestyles reflect their declared incomes.
The General Laws Amendment Bill of 2025 would let the FIC perform these audits not just based on suspicious activity, but proactively. This means they could initiate checks even without specific evidence of wrongdoing.
Another key aspect of the bill is that it requires banks and financial institutions to keep records for seven years instead of five. If the bill passes, the FIC could start audits at the request of government entities if they believe the information is relevant. They would also have access to municipal and public entity databases.
Since the bill was gazetted in January, public response has been mostly negative. Many people express concerns that it infringes on privacy rights and could push South Africa toward a more intrusive governance style. The Law Society of South Africa (LSSA) has raised alarms about how these powers could conflict with legal professional privilege, affecting lawyers’ ability to represent clients fully.
Meanwhile, organizations like Corruption Watch are more supportive. They argue that strengthening monitoring mechanisms is vital to meeting international standards and maintaining a good standing with the Financial Action Task Force (FATF), which recently recognized South Africa’s efforts to improve anti-money laundering practices.
The proposed changes won’t directly expand SARS’s powers. Instead, they enhance the FIC’s ability to conduct audits and share findings with SARS and other government agencies. This collaboration could improve the state’s capacity to tackle money laundering and terrorism financing.
Interestingly, similar audits have been conducted in the past, highlighting discrepancies between reported income and lifestyle. These practices have raised questions about fairness and transparency in governance. As we move forward, it will be essential to balance effective regulation with the preservation of individual rights.
As the public weighs in, the deadline for comments on the bill is February 13. The outcome could reshape the landscape of financial oversight in South Africa.
For more insights, you can read the original details on Moneyweb here.
