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Public Other countries Author: Ljubica Blagojević
The South African Revenue Service (SARS) is advancing its VAT Modernization program, which aims to introduce structured e-invoicing and near real-time invoice data reporting to replace periodic VAT filings. The system will enable ERP-based invoice transmission and AI-driven cross-checks to improve compliance and reduce the estimated R800 billion tax gap. Development and consultations are planned for 2026–2027, with phased implementation expected from 2028, likely using a decentralized model similar to the Peppol framework.
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The proposed framework relies on near-real-time transmission of invoice data from business ERP systems to SARS, supported by artificial intelligence for automated cross-checking and potential pre-populated VAT assessments. The initiative aims to reduce South Africa’s estimated R800 billion tax gap through improved transparency and enforcement.

According to updates from February 2026, the implementation roadmap is structured as follows:

  • 2026–2027: Development of system architecture, legal framework reviews, and pilot consultations with stakeholders.
  • 2028: Expected phased rollout of the e-invoicing framework, starting with the largest taxpayers.

SARS is reportedly considering an interoperable, decentralized exchange model similar to the Peppol 5-corner framework, allowing invoice data to be exchanged across different business platforms.
The reform signals South Africa’s move toward continuous transaction controls (CTC) and digital VAT reporting. For businesses, this will likely require ERP integration, structured invoice formats, and real-time data exchange with tax authorities, while also reducing compliance burdens through automation and improved reporting accuracy.

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