SARS Plans VAT Auto-Assessment as R4.5 Billion Modernisation Drive Kicks Off

• SARS received an additional allocation of between R4 billion and R4.5 billion to accelerate its modernisation programme
• The tax authority plans to roll out VAT auto-assessment by connecting to every point of sale using e-Invoices and real-time data
• South African taxpayers shared mixed reactions to the news of further automation at SARS

The South African Revenue Service is pushing ahead with a sweeping technology overhaul, and VAT auto-assessment is firmly in its sights.

SARS Commissioner Johnstone Makhubu confirmed that the taxman expects to receive between R4 billion and R4.5 billion in additional in-year funding from National Treasury. The money follows Finance Minister Enoch Godongwana's Medium Term Budget Policy Statement, during which the Special Appropriation Bill 2026 was tabled, providing an extra R6.9 billion beyond the Adjustments Appropriation Bill across four allocations. The SARS modernisation programme received the largest share.

Speaking to 702, Makhubu outlined how the funds would be spent. Priorities include deploying track-and-trace systems for excisable products, replacing outdated fuel-adulteration detection markers, and advancing the broader VAT modernisation agenda.

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SARS eyes real-time VAT data

Earlier in 2026, SARS published a VAT Modernisation Consultation Paper describing a future where "tax just happens" through data science, artificial intelligence, and digital services embedded across the VAT ecosystem. The plan mirrors the income tax modernisation journey of the past decade.

According to BusinessTech reports, the goal is to link SARS to every point of sale through e-Invoices, an Interoperability Framework, and e-Reporting, enabling near real-time transactional data flows. The ultimate aim is SARS-led VAT auto-assessment, similar to what individual taxpayers already experience. Auto-assessments were introduced in 2021 and have grown rapidly, with over six million taxpayers auto-assessed in 2026, a figure expected to rise again in 2027.

Tax collections beat targets

SARS's modernisation push comes on the back of strong revenue performance. By 30 September 2026, the taxman had collected R992.2 billion in net revenue, which was R15.5 billion, or 1.6%, above the February 2026 Budget estimate and R67.4 billion, or 7.3%, higher than the same period last year.

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Godongwana revised the full-year tax collection target upward to a record R2.144 trillion, an increase of R17.1 billion on the February estimate. This came despite the Treasury cutting its 2026 GDP growth forecast from 1.6% to 1.2%.

Compliance enforcement also remained aggressive. In the first six months of the financial year, SARS secured a preliminary R137.7 billion through compliance interventions, comprising R76.3 billion in direct cash collections and R61.3 billion in prevented revenue leakage.

South Africans had plenty to say about the news on BusinessTech SA's Instagram post:

@christopherbyron77 said:

"More AI... More taxes."

@kotze.stephan wrote:

"They have to, as the submit button is now optional as per the constitutional court."

@nic.muhl commented:

"Maybe spend more money on investigating what happens to our tax money rather than trying to just steal more from the taxpayers."

@maraisshawn said:

"Greater theft."

@anayager007 wrote:

"SARS ought to really🔥"

More Briefly News stories on SARS

• SARS has reissued final demand letters to trusts with unfiled tax returns. Trustees have 21 business days to file before monthly penalties of up to R16,000 apply.
• SARS may scrutinise unexplained deposits, including transfers between your own bank accounts. Find out why records matter when tax assessments are at stake.
• A High Court ruling gives a South African business a win against SARS after disputed tax assessments, highlighting risks linked to outsourced tax compliance.

Source: Briefly News