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South Africa VAT Digital Reporting & E-Invoicing: The Road to 2028

The South African Revenue Services (SARS) is on the brink of a significant transformation in its value-added tax (VAT) system, with the introduction of mandatory e-invoicing and e-reporting anticipated to be fully operational by 2028.

This initiative aims to modernize VAT compliance, enhance efficiency in tax collection, and foster a more robust financial ecosystem.

Introduction to E-Invoicing and E-Reporting

E-invoicing and e-reporting are critical components in SARS’s VAT modernization strategy. By moving towards an interoperable Peppol-based framework, SARS seeks to streamline the invoicing process for all stakeholders in the supply chain.

  1. E-Invoice Definition: An e-invoice is defined as a tax invoice that is issued, transmitted, and received in a structured electronic format. This format allows for automatic processing, which reduces manual interventions and minimizes errors. The Minister of Finance may outline further technical specifications to ensure a high standard of compliance.
  2. E-Reporting Definition: E-reporting involves the electronic submission of tax data derived from e-invoices, e-debit notes, and e-credit notes to SARS. This also includes reporting requirements to applicable suppliers and service providers. E-reporting will enhance transparency and facilitate real-time access to essential tax information.
  3. Interoperability Framework: The interoperability framework will leverage a network of certified service providers to enable the decentralized exchange of e-documents such as invoices and notes. This system aims to ensure efficient clearance processes and smooth interoperability between suppliers, service providers, and recipients.

Timeline for Implementation

The introduction of this e-invoicing and e-reporting framework will unfold in phases, as outlined in the proposed timeline:

  • 2025: Legislative Framework Established
    The foundation for e-invoicing will be laid with the Draft Tax Administration Laws Amendment Bill (TALAB). This bill will outline the necessary frameworks and regulations for e-invoicing.
  • 2026–2027: Framework Publication and Stakeholder Engagement
    During these years, SARS will publish the detailed operational framework and engage with various stakeholders, including businesses and tax professionals, to ensure an informed rollout process. This phase will also include phased onboarding to help companies integrate e-invoicing practices smoothly.
  • 2028: Full Operational Capability
    The target state is set for 2028 when full operational capacity will be achieved. At this point, all businesses will be expected to comply with the e-invoicing and e-reporting requirements, leading to better compliance rates and enhanced efficiency.

The Benefits of E-Invoicing and E-Reporting

The adoption of e-invoicing and e-reporting in South Africa promises several benefits:

  • Increased Compliance: Automated systems will help reduce compliance costs and increase adherence to VAT regulations.
  • Enhanced Efficiency: The elimination of paper-based invoices reduces processing times and administrative burdens for businesses.
  • Improved Data Accuracy: Automating invoice processes minimizes human error, ensuring more accurate tax reporting.
  • Real-Time Reporting: E-reporting facilitates timely data sharing with SARS, allowing for quicker audits and improved tax compliance.

Conclusion

As South Africa braces itself for the impending launch of mandatory e-invoicing and e-reporting, businesses must prepare for a significant shift in the VAT landscape. By aligning their processes with the forthcoming requirements, organizations can enhance their operational efficiency and ensure compliance with the Revenue Services. The initiative not only positions SARS to better manage tax collection but also paves the way for a more digitized economy, ready to meet the challenges of the future. Stakeholders are encouraged to engage with SARS in the coming years to ensure a successful transition to this new framework, making their voices heard in shaping the future of VAT compliance in South Africa.

How Can KGT Support You?

KGT has created an SAP-integrated SAF-T add-on solution for South Africa, featuring outbound and inbound functionalities to meet tax reporting requirements. This add-on includes a data extractor and a cockpit for generating periodic e-invoicing files in the legal format and controls before submission. When SAP DRC launched the South African e-invoicing solution as part of its e-document offerings, KGT emerged as a leading consultancy firm for SAP DRC and tax services. Recognized as an SAP DRC partner for South African services, KGT is one of SAP's recommended implementation partners for this solution. We provide comprehensive support, including installation, configuration, customization, and training, to help you maximize the long-term value of your SAP DRC investment.

KGT is an SAP partner for PE services and an SAP Build partner, and to become an SAP partner, strict due diligence requirements must be met, including having certified SAP consultants. You can find us at: https://partnerfinder.sap.com/profile/0001925409

Country update for South Africa
02 February 2026
Stay informed about the latest indirect tax developments in South Africa, including regulatory changes, compliance requirements, and indirect tax guidance affecting businesses operating locally and cross-border. This page provides a structured overview of country-specific updates, such as new legislation, reporting obligations, digital tax initiatives, and implementation timelines.
These insights help tax, finance, and compliance professionals anticipate regulatory changes, adjust processes and systems, and maintain compliant operations in South Africa.