South Africa is considering a digital VAT reporting system that would provide tax authorities with transaction information in near real time, potentially improving compliance and accelerating legitimate refunds. A consultation paper published by the South African Revenue Service in August proposes standardized digital invoices that could automatically populate VAT returns and help identify discrepancies. The reform targets an estimated domestic VAT reporting gap of 35% to 41% between 2016 and 2020; the tax generated about $28 billion in 2024/25. Researchers say evidence from Uganda, Rwanda, and Ethiopia suggests that electronic invoicing can improve reporting. Studies also show that audits can strengthen the effectiveness of digital records. Meanwhile, evidence from South Africa indicates that faster refund processing can encourage business investment, particularly among smaller firms.