What is the VAT Modernisation initiative?
Aligned to SARS Modernisation 3.0, VAT modernisation forms part of SARS’s journey to be a smart, trusted and data-driven tax administration. By embedding data science, artificial intelligence, and digital services into the VAT ecosystem, SARS aims to make compliance easier, reduce administrative burden, and strengthen voluntary compliance. This transformation will improve taxpayer interactions, foster trust, promote efficiency, and enhance transparency.
International trends, together with the anticipated benefits of a modernised VAT-administration framework, have prompted SARS to adopt globally recognised best-practice to enhance the taxpayer experience, close the VAT gap, reduce fraud, and increase revenue.
The direction for VAT modernisation is to connect SARS across the VAT value chain to every point of sale, using e-Invoices, , an Interoperability Framework and e-Reporting to enable trusted, structured, and near real-time transactional data flows. This will progressively embed VAT compliance into the natural systems of business, support AI-enabled risk detection and analytics and create the foundation for SARS-led VAT auto-assessment.
The VAT Modernisation Consultation Paper
In publishing the Consultation Paper, SARS invites stakeholders including businesses (vendors), software developers, and public-finance entities to submit feedback as part of the implementation, which is tailored to South Africa’s context.
Access the consultation paper here.
Responses must be submitted by using the link in the Consultation Paper. The closing date for submission is 16 October 2026.
Useful information
17 August 2026 – Media release: SARS invites public input on a new digital VAT model to modernise VAT administration
SARS aspires for a future in which tax just happens for most of taxpayers by leveraging data and technology. To this end, and pursuant to the VAT Modernisation Discussion Paper of 2023, the South African Revenue Service (SARS) is pleased to release the VAT Modernisation Consultation Paper for public consultation and comment, calling on all impacted and interested stakeholders to contribute to a modern, transparent and efficient VAT administration system in South Africa.
See the full media release here.
