SARS Modernisation Project To Phase Out Individual Tax Numbers In Favor Of Universal Biometric Digital Identity

SARS is phasing out tax numbers for a unique digital identity. Discover how Modernisation 3.0 and biometrics will change tax compliance and fraud prevention in SA.

By: AXL Media

Published: Apr 4, 2026, 6:27 AM EDT

Source: The information in this article was sourced from Daily Investor

The End Of Multiple State Identities

The South African government is moving toward a unified digital identity system that will effectively eliminate the need for separate SARS tax numbers and Home Affairs ID numbers. Currently, the state identifies many of its 62 million citizens through seven or eight different digital markers—including VAT numbers, hospital records, and traditional IDs. SARS Commissioner Edward Kieswetter noted that this fragmented system creates significant opportunities for arbitrage, crime, and fraud. By consolidating these into a single "whole-of-government" population register, the state intends to streamline service delivery and close loopholes used to evade tax compliance.

Modernisation 3.0 And Automated Compliance

The shift toward a unique digital ID is a cornerstone of the SARS Modernisation 3.0 project. While much of this technological overhaul focuses on the real-time automation of VAT systems to enhance collection efficiency, its impact on individual taxpayers is equally transformative. The project follows a seven-year period of rebuilding institutional capacity and seeks to position SARS as a technology-led entity. This strategy appears to be yielding results, with the revenue service recently announcing it collected over R2 trillion in a single financial year for the first time in South African history.

Transitioning From Passwords To Biometrics

As part of the modernization effort, SARS is moving away from traditional username and password authentication, which Kieswetter described as "old school" and prone to compromise. Because many taxpayers only engage with the system once a year, forgotten credentials have become a major administrative bottleneck. To resolve this, SARS has deployed biometric authentication over the past 18 months, coupled with two-factor authentication for high-risk processes such as bank detail changes and tax refunds. These layers are designed to protect citizens from increasingly sophisticated phishing scams and unauthorized account access.