Business · Companies · 4 hrs ago
Sars approves R2.75-billion in Microsoft and IBM contracts without open tenders
South Africa’s Revenue Service, known as Sars, has approved contracts worth R2.75-billion with Microsoft and IBM over three years.
The Microsoft contract is worth R1.58-billion and renews software licences and support.
The IBM contract is worth R1.17-billion and covers hardware, software, maintenance, support and professional services.
Sars awarded both contracts without open tenders, using supplier agreements negotiated by the State IT Agency.
The spending comes as Sars expands its use of digital tools, including AI assistants for staff and taxpayers.
Its online assistant had answered more than 2.7 million taxpayer questions by the end of March 2026, while Sars has also warned that underfunding could affect its work.
Sars will pay Microsoft R1.58-billion over three years to renew software licences and support.
It will pay IBM R1.17-billion over three years for hardware, software, maintenance, support and professional services.
The contracts were approved without open tenders and classified as sole-source awards.
Both deals use framework agreements pre-negotiated by the State IT Agency.
The contracts are listed in Sars’s 2025/2026 annual report.
- Who
- The South African Revenue Service, Microsoft and IBM.
- What
- Sars approved contracts worth R1.58-billion with Microsoft and R1.17-billion with IBM without open tenders.
- When
- The contracts are listed in Sars’s 2025/2026 annual report. The article was published on 12 October 2026.
- Where
- South Africa.
- Why
- The Microsoft contract renews enterprise licences and unified support; the IBM contract renews hardware, software, maintenance, support and professional services.
This story does not have two clearly opposing sides.
sole source (limited bid)
Sars’s annual report lists the Microsoft and IBM contracts as procurement by other means.
TechCentral reported the contract values and that the deals were approved without open tenders.
- Microsoft contract
- R1.58-billion over three years
- IBM contract
- R1.17-billion over three years
- Microsoft annual cost
- Roughly R526-million a year
- Procurement method
- Sole source (limited bid)
- Framework agreements
- Pre-negotiated by the State IT Agency
Sources
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