🇲🇬 MG – Madagascar Sets 2025 Stage for E-Invoicing Overhaul to Tackle VAT Fraud, Boost Compliance

ANTANANARIVO – Madagascar is preparing to introduce a centralized e-invoicing platform as part of sweeping reforms in its 2025 Finance Law, signaling a digital tax transformation aimed at bolstering VAT compliance, combating fraud, and increasing revenue collection efficiency.

While no firm rollout date has been announced, tax officials confirm the Direction Générale des Impôts (DGI) is laying the groundwork for mandatory electronic VAT invoicing—a move that aligns the island nation with global trends in real-time tax reporting and fiscal digitalization.

Context & Background: A Shift from Manual to Machine-Led Tax Integrity

Madagascar’s current VAT system has long depended on manual records, import declarations, and local sales taxes, leaving gaps ripe for undetected transactions and fraudulent underreporting. The upcoming e-facturation platform will serve as a centralized invoice data hub, collecting structured digital invoices in real time.

Part of a broader fiscal modernization strategy, the Finance Law signals the state’s intention to phase out the outdated turnover tax regime in favor of a streamlined, tech-driven VAT model more aligned with OECD best practices.

“E-invoicing is not just a tech upgrade; it’s the cornerstone of modern tax administration,” said a senior official at the Ministry of Economy and Finance. “This move will reshape how tax is enforced and collected across sectors.”

Economic & Compliance Impacts: What Businesses Should Expect

Compliance Gains:

• Automated invoice validation for VAT returns
• Real-time transaction monitoring to reduce fraud
• Simplified tax filing, especially for SMEs using approved software

Business Concerns:

• Implementation costs for digital systems, especially among small traders
• Training burdens in regions with limited digital literacy
• System integration pressure for multinational companies with ERP platforms

Despite these hurdles, Madagascar aims to mirror the success of countries like Chile, Italy, and India, where e-invoicing led to a double-digit jump in VAT collection and audit efficiency.

Beyond Invoicing: Madagascar’s Broader Tax Digitalization Drive

The e-invoicing initiative is part of a suite of digital reforms including:

• e-VAT Reporting Portal for standardized VAT returns
• e-Balance Sheet Filing to verify corporate tax disclosures
• Telepayment Systems for faster, transparent tax settlements
• Digital VAT on Services, including streaming and cloud platforms
• Mobile Taxation Pilot to capture synthetic taxes from the informal economy

In 2023, Madagascar recovered 97.48% of forecasted tax revenues—a record performance attributed to these digital interventions despite global headwinds.

Expert Insight: Compliance Leap, Not a Luxury

“Mandating e-invoicing in a developing tax environment is both bold and necessary,” says Dr. Léon Ravoahangy, a regional VAT consultant based in Mauritius. “It levels the field for honest businesses and brings shadow transactions into the light.”

What to Watch Next

• Implementation Date: Expected in late 2025, pending technical readiness and stakeholder buy-in
• Regulatory Decrees: Sector-specific invoice formatting rules anticipated mid-year
• Private Sector Consultation: Feedback loops and digital vendor accreditation underway
• Integration with Customs Systems: Expected in Phase II for full import-export traceability

For further details, clarification, contributions, or any concerns regarding this article, please contact us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries