Regulatory updates - South Africa

On August 16, 2025, the National Treasury and the South African Revenue Service (SARS) released the 2025 Draft Tax Administration Laws Amendment Bill (TALAB) for public comment, open until September 12, 2025. The bill provides the legislative foundation for implementing real-time VAT reporting and digital tax administration.

As previously analyzed, the bill is designed to enable SARS’s VAT Modernisation Project, which aims to transform the country’s VAT system through digital innovation and improved compliance mechanisms.

A central feature of the project is the introduction of real-time data transmission from vendors to SARS. This shift will significantly change how VAT is reported, monitored, and enforced.

The project will also cover the following objectives:

• Digitizing tax processes to improve efficiency and enhance taxpayer interaction,
• Reducing the VAT gap, currently estimated at R800 billion annually,
• Streamlining administration for both businesses and SARS through automation and integration.

On March 11, 2025, SARS published an official letter obliging taxpayers to include invoice data in all electronic customs declarations submitted to SARS.

If invoice data is missing on the customs declaration, there will be a higher chance of it being selected for inspection or audit.

The regulation became effective on April 1, 2025.

On 8 September 2023, the South African Revenue Service (SARS) published the Discussion Paper intended to simplify and modernize the current VAT system.

To achieve this, SARS unveiled public consultation on real-time reporting of VAT invoice data to ease the VAT return process.

How would the model look?

The VAT data acquired from the issued/received tax invoices or electronic tax invoices and made/received payments processed in the accounting data system will be digitally transmitted to SARS, i.e., manual portals, cash receipt devices.

The data is to be transmitted on a near-real-time (RTR) basis. The transmission must occur within a 24-hour period by the subsequent reduction of this period to 6-hour and 1-hour data reports.

The RTR transaction report will be used to pre-fill VAT returns for taxpayers. Taxpayers will still be required to report VAT data for VAT return purposes before the due date.

The implementation of digital VAT data transmission is planned over the period of 5 years.

What has SARS learnt from the international experience?

SARS researched and analyzed electronic invoicing introduction and implementation in 11 countries and the recent developments under the VAT in the Digital Age (ViDA) proposal within the EU.

After reviewing the various experiences, SARS is aiming to meet certain requirements:

• Announcing 5-year requirement for recordkeeping.
• Introducing new platforms capable of processing and storing large amounts of data.
• Building an efficient e-invoice validation system and process.
• Imposing penalties for non-compliance.
• Building a secure system capable of withstanding possible cyber-attacks.
• Implementing e-invoicing on a gradual basis starting with large taxpayers.