South Africa: Tax authority confirms multi-year e-invoicing and digital reporting reform

South Africa has been reinforcing its commitment to nationwide electronic invoicing (e-invoicing) and real-time value added tax (VAT) digital reporting through several major strategic publications released between 2022 and 2025. These documents include the VAT Modernization Discussion Paper (2023), SARS Modernization Whitepaper 3.0 (2025/26–2029/30), SARS Annual Performance Plan 2025/26, SARS Strategic Plan 2025/26–2029/30, and SARS Strategic Plan Mid Term Progress Report 2020–2025. Collectively, these publications confirm that e-invoicing will play a central role in future VAT administration, supporting the national objective to “make tax just happen.”

Background

South Africa has positioned e-invoicing and VAT digital reporting as core elements of the tax authority’s (South African Revenue Service, SARS) long-term modernization strategy. The SARS Strategic Plan 2025–2030, Modernization 3.0 roadmap, and the Mid Term Progress Report for 2020–2025 consistently frame digital VAT controls as a structural reform necessary to strengthen revenue collection, reduce the VAT gap, and future-proof the tax authority. The government is transitioning from traditional declaration-based VAT to a system driven by real-time, transaction-level data, with e-invoicing as a foundational pillar.

Overview of amendments

The strategic rationale for e-invoicing is outlined in SARS’s latest plans, which describe the tax environment as increasingly complex and constrained by illicit trade, declining tax morality, and structural weaknesses in revenue collection. The Mid Term Report highlights that VAT fraud, refund abuse, and persistent non-compliance have widened the tax gap. SARS identified the need for deeper access to verifiable transactional data and automation of compliance monitoring, which e-invoicing is intended to address. The Strategic Plan 2025–2030 confirmed that modernizing VAT, including mandatory e-invoicing, is one of eight “generational initiatives” designed to transform SARS into a highly digital, data-driven authority capable of detecting risk at the point of transaction.

Lessons from the 2020–2025 Mid Term Review show that digital channels and technology-enabled compliance have improved administrative efficiency, taxpayer experience, and revenue stability. The most significant compliance gains were achieved when reliable third-party data was available, supporting the move toward real-time invoice-level data.

The future VAT operating model will center on real-time or near real-time transmission of structured invoice data directly from business systems to SARS. Initial transmission may occur daily, moving toward shorter intervals as capacity improves. The new model will feature a redesigned VAT return leveraging richer transactional detail, automated cross-checks, and eventually pre-populated or auto-assessed VAT liabilities. Technical pathways will include secure batch channels (SFTP, Connect Direct, Message Queue) and API-based options for cloud-enabled enterprise resource planning (ERP) and small and medium enterprise (SME) accounting tools. Early phases will focus on the largest VAT contributors—Category C filers, major business-to-government (B2G) taxpayers, and high-risk sectors—representing the majority of national VAT revenue.

Alignment across SARS’s strategic frameworks places e-invoicing as part of a broader institutional transformation. The Strategic Plan 2025–2030 emphasizes becoming an “AI-enabled, insight-driven tax authority,” with digital VAT reforms linked to national development objectives and improved trade efficiency, supply chain transparency, and interoperability with digital identity and payments ecosystems.

Next steps

Exact implementation dates are pending further consultations and capacity development. SARS’s multi-year planning documents indicate a phased approach beginning with system design and pilot engagement through 2026, followed by onboarding of large VAT taxpayers and priority sectors between 2026 and 2029. Later phases will expand coverage to medium-sized enterprises, increase automation of VAT assessments, and integrate e-invoicing data with risk engines and customs/trade systems. SARS aims to achieve a system in which compliance is seamless—where “tax just happens.”

Contacts

For further information, contact a KPMG tax professional:

Tania Davids | tania.davids@kpmg.co.za

Madelein Van Zyl | madelein.vanzyl@kpmg.co.za

Lyubov Skenderova | skenderova.lyubov@kpmg.com

Philippe Stephanny | philippestephanny@kpmg.com

Ramon Frias | Ramonfrias@kpmg.com