South African Revenue Service proposes digital VAT model

The South African Revenue Service (SARS) has released a consultation paper regarding a proposed Digital VAT Model aimed at modernising the country's tax administration. The initiative, part of SARS Modernisation 3.0, seeks to implement e-invoicing, an interoperability framework, and e-reporting to facilitate the near-real-time flow of transaction data. The goal is to create a more transparent, efficient, and resilient system that reduces compliance burdens for taxpayers.

Separately, legal clarifications have emerged regarding the limits of SARS's authority to reopen tax assessments. While SARS is generally prohibited from challenging income tax assessments older than three years, it may do so if it can prove fraud, misrepresentation, or the non-disclosure of material facts. To bypass the three-year prescription period, a causal link must be established between the taxpayer's conduct and the incorrect assessment.