SARS wants to give every taxpayer in South Africa a digital identity
The South African Revenue Service’s (SARS’s) digital transformation roadmap for 2026 to 2030 will see each taxpayer assigned a digital identity and the eventual automation of VAT assessments.
Presenting the 2026 Revenue Announcement, SARS commissioner Edward Kieswetter highlighted some of the technological advancements planned for the entity, dubbed “Modernisation 3.0”.
“Taxpayers and their nominated representatives, in the future, will be allocated a unique digital identity,” he said.
Through this digital identity, taxpayers will be able to access a comprehensive review of their tax accounts and registered products.
However, Kieswetter emphasised that access will be protected through biometric verification and two-factor authentication.
Once verified, taxpayers will be able to access a comprehensive overview of their account to view and update it.
The system will also ensure that taxpayers can check their compliance status, submit queries about their accounts, and fulfil any compliance and payment obligations.
“Similarly, to enhance taxpayers’ service, our employees, who are appropriately skilled and professional, will be empowered to view the comprehensive accounts of taxpayers,” said Kieswetter.
“Through this, they will similarly be empowered to resolve any query, and progress or resolve any outstanding matter on behalf of the taxpayer.”
Aside from the digital identity, SARS will partner with the South African Reserve Bank (SARB) to build a cost-effective instant payment system.
Kieswetter said the system is intended to increase financial inclusion, reduce cash in circulation, and strengthen the overall integrity of the national payments system.
The taxman also has plans to develop an intelligent case management system, which Kieswetter said will be central to the strategic intent of voluntary compliance.
The intelligent case management system will automate future routing tasks, leverage big data, and leverage agentic artificial intelligence.
Lastly, SARS also wants to modernise the value-added tax (VAT) system by linking its systems to points of sale throughout the value chain, which will ultimately enable the automatic assessment of VAT returns.
Big modernisation drive at Sars
Funding to modernise the taxman’s systems became a major focus point in February 2025, following the first postponement of South Africa’s budget speech since the country became a democracy.
A proposed VAT increase from 15% to 17% sparked a disagreement within the Government of National Unity, and fierce backlash from opposition parties.
The Democratic Alliance (DA) called on the government to inject more money into the revenue service to modernise its systems and crack down on non-compliance, rather than raising taxes.
“There is no need to tax to find these funds, which can easily be sourced from failing, failed, and underperforming programmes and subprogrammes,” the DA said.
The party’s views aligned with previous comments from Kieswetter, who said as much as R800 billion in tax went uncollected due to outdated systems and practices.
He explained that SARS was once a leader in digital modernisation in South Africa before state capture. However, the entity was poorly funded during the state capture era.
“Partly due to financial constraints, but also a short-term approach, budgets were frozen for a number of years, and SARS fell behind in driving technological innovation,” Kieswetter said.
“We have now managed to restore some additional funds to continue our modernisation, but we are still substantially underfunded to move at speed in an environment that is changing exponentially.”
The commissioner added that SARS not only had to play catch-up, but also accelerate its modernisation to remain relevant.
“The important lesson here is that the digitalisation journey is not a finite project, but a new way of being. It is an ongoing journey,” he said.
“Once you suspend funding, the end result will always be the suspension of innovation and regression against the progress of other administrations.”
Finance minister Enoch Godongwana subsequently allocated R7.5 billion in extra funding to SARS over the medium term.
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