SARS published its VAT Modernisation Consultation Paper on 17 August and gave stakeholders until 16 October to comment on it. The paper proposes a Digital VAT Model that brings together electronic invoicing, an interoperability framework and electronic reporting, with the aim of moving VAT transaction data across the economy close to the moment a sale happens.
How it would work
The design is a five-corner model, and the corners are worth naming because each one is a piece of work for somebody. Your accounting or ERP system issues an invoice in a machine-readable format rather than a PDF or a scanned document. It goes to an accredited access point, a licensed operator that validates and clears the invoice. That operator routes it to your customer's access point, which validates it again before delivering it. Both then report the cleared invoice to a fifth corner, a service provider acting for SARS. A Network Authority would accredit those providers and enforce the rules.
What SARS gets out of it is data it can act on. It intends to use the transaction flow to pre-fill VAT returns and, over time, to assess VAT liability automatically, with taxpayers confirming or amending the result so self-assessment survives. Commissioner Johnstone Makhubu said the model "seeks to move us from a system that is still too dependent on manual processes and retrospective verification, to one where VAT compliance becomes part of the systems businesses already use every day".
The dates inside the paper
The roadmap in the paper, as read by TechCentral, sets out five phases. Preparation, including the publication of draft VAT regulations, runs about 12 months from 2026/27. Solution development takes another 12 months in 2027/28, ending with those regulations promulgated. Quality assurance testing follows for roughly six months in 2028/29, then a pilot with voluntary participants for six months in 2029/30. Phased implementation is expected to begin during 2030 and run about 36 months. That lands full roll-out around 2033.
Through 2026, electronic-invoicing vendors and tax advisory firms had projected full operational capability at 2028, most hedging the date as indicative and subject to regulations that had not been written. Still though, that is not an argument for sitting still. Large taxpayers will need systems able to issue and receive structured invoices, contracts with accredited operators, and finance processes rebuilt around continuous validation rather than month-end reconciliation, and those are multi-year builds.
Three of the load-bearing questions are still open. Who runs the Network Authority, and which standards it adopts, depend on selection and procurement processes SARS says it is finalising. On cost, SARS acknowledges taxpayers will have to invest in technology and integration, and says it will engage software providers on tiered subscription models to consider subsidised or low-cost options. And "near real-time", the phrase the whole model rests on, is left to be defined in legislation.
The paper carries its own disclaimer: the contents reflect SARS's current understanding of the proposed framework and may be refined after stakeholder input and further analysis.
