South Africa’s tax authority is moving to issue every taxpayer with a unique digital identity under a major overhaul that blends biometrics, artificial intelligence, and instant payments into a single compliance system.
The South African Revenue Service (SARS) has launched “Modernisation 3.0,” a programme that will consolidate taxpayer records into one authenticated profile secured by biometric and two-factor verification (2FA). The system is designed to give individuals and representatives a single view of their tax affairs, allowing them to update details, check accounts, and make payments without interacting directly with the agency.
The shift comes as SARS reported a record R2.01 trillion ($119.2 billion) in net revenue for the 2025/26 financial year, its first time crossing the R2 trillion ($119 billion) mark. The figure reflects strong growth in collections and signals the scale of the tax base the agency is now seeking to manage through automation.
Modernisation 3.0 also expands SARS’s use of artificial intelligence. The agency plans to deploy systems it describes as “agentic AI” to automate routine compliance work, analyse large datasets, and flag risks for investigation. These tools will also support a broader push toward voluntary compliance by reducing manual processes.
A key component of the overhaul is a new instant payment system being developed with the South African Reserve Bank (SARB), the country’s central bank. The system aims to speed up tax payments and reduce reliance on cash-based transactions, aligning with broader efforts to digitise the country’s payments infrastructure.
SARS said the programme will also extend to value-added tax (VAT) assessments and customs processes, including a move toward automated VAT returns and a “no-stop border post” model for trade flows.
Edward Kieswetter, the agency’s commissioner, said the direction of the programme reflects a system where “tax just happens,” building on existing auto-assessment tools that already process millions of taxpayers without manual intervention.
The agency estimates it prevented about R75 billion ($4.5 billion) in revenue leakage in the past year through data-driven enforcement and compliance work.