The visit coincided with a significant milestone as the project had just completed its Initial Operational Capability (IOC) phase. This phase represents a critical step toward the system’s Full Operational Capability (FOC), the stage when the VSMS will be fully operational and capable of monitoring sales across the country.

During the briefing, the DCIR team, in collaboration with Data Tech International (DTI), presented a detailed update demonstrating that the system is ready to move into the next stage. Officials highlighted the steady pace of implementation and the system’s capacity to enhance oversight in the national tax process.

The presence of the nation’s top leaders accentuated the government’s commitment to advancing digital tools for more effective tax administration. Their visit emphasized both political support and public accountability for this high-priority initiative.

System Objectives and Achievements

Ms. Maja Miodragović, DTI Account Manager, showcased the VSMS’s achievements to date, highlighting the system’s core objectives. These include reducing tax fraud and under-reporting, strengthening tax compliance, maximizing revenue collection, promoting transparency, and supporting fair competition among businesses.

The briefing highlighted how registration and accreditation activities are advancing steadily, bringing more businesses into the system. These efforts demonstrate the VSMS’s ability to integrate with existing structures while preparing for broader implementation across sectors.

Furthermore, officials presented measurable progress in each area, indicating that the system is on track to meet its design goals. The collaboration between DCIR and DTI has been focal to achieving these objectives, combining technical expertise with operational oversight.

This stage of the project reflects the government’s dedication to transforming Vanuatu’s tax system and preparing for a fully operational, digital monitoring platform.

VSMS by TaxCore: Government Endorsement and Next Steps

Both the Prime Minister and Minister of Finance expressed their satisfaction with the progress achieved. They publicly commended the strong partnership between DCIR and DTI, framing the project as a transformative initiative for Vanuatu’s fiscal administration.

“I commend the joint efforts of DTI and DCIR,” the Prime Minister said. “I am enthusiastic about the upcoming phases and eager to see the first results. We look forward to Vanuatu’s continued progress toward digital transformation.”

Finally, the visit concluded with a reaffirmation of the government’s commitment to digital transformation. With the VSMS moving steadily toward Full Operational Capability, the leadership’s endorsement indicates continued support for the system’s implementation and operational expansion.

The positive outcome of this visit provides a strong setting: Vanuatu is advancing in digital tax compliance, aligning practical technology deployment with governmental oversight, and setting the stage for a fully operational, transparent, and accountable system that benefits both the state and its businesses.

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For Gesa, the Deputy Director of Inland Revenue at Vanuatu’s Ministry of Finance, the sentence is the central dilemma of governing this South Pacific nation of just over 300,000 people spread across 83 islands. His department does collect money, yes, but that money keeps the lights on in schools, funds healthcare, maintains ports, and pays for the asphalt that connects villages to towns as well. Revenue is the bloodstream of the government, and for years too much of it has been slipping away into a shadowy maze of unrecorded cash transactions.

Rewriting the Rules of Taxation – Locally

Now, in a move that would sound ambitious in far larger economies, Vanuatu is locally rewriting the rules of taxation. The solution: a fully digitized tax monitoring system, designed to catch in real time what once vanished without a trace. The name is as technical as it is unassuming, the Value Added Tax Monitoring System, or VSMS powered by Data Tech International’s TaxCore, but behind it lies a confident idea. “It is a full-fledged journey,” Gesa says, a hint of pride creeping into his usually clipped delivery. And he means it literally: the journey from manual ledgers and patchwork reporting to e-invoicing powered by live data.

The Ministry of Finance and Economic Management, through the Department of Customs and Inland Revenue (DCIR) led by Mr Harold Tarosa, is preparing to roll out the new Vanuatu Sales Monitoring System (VSMS) to improve Value Added Tax (VAT) collection nationwide. The system will be introduced between August 2025 and January 2026.

At the heart of this shift is a partnership with Data Tech International (DTI), a company with global experience in fiscal solutions, and its platform Taxcore, which is powering VSMS. As always, the collaboration is much more than a technical handoff but a daily, evolving dialogue, one that, in Gesa’s telling, has already given his team a newfound sense of confidence.

5 Key Takeaways

1. From Informal Chaos to Digital Order: Vanuatu’s economy has long been dominated by an informal cash sector that left government coffers starved. With VAT as the country’s financial lifeline, the introduction of the Value Added Tax Monitoring System (VSMS) powered by Data Tech International’s TaxCore is designed to bring transparency and accuracy to revenue collection.

2. A Partnership That Fits Local Realities: Unlike one-size-fits-all solutions, the collaboration between Vanuatu’s Inland Revenue Department and Data Tech International has been deeply customized. Learning from Fiji and Samoa’s experiences, Vanuatu tailored the e-invoicing system to its own context, with DTI working closely alongside a dedicated local project team.

3. Real-Time Data, Real-Time Accountability: Every transaction in the system generates an e-invoice that is logged instantly. This live data stream ends the old reliance on quarterly filings and guesswork, giving policymakers the tools to monitor revenue, plan budgets, and address gaps with precision, even when offline.

4. Businesses as Partners, Not Targets: For Vanuatu’s enterprises, especially small and medium-sized ones, VSMS simplifies record-keeping and VAT filing, reducing administrative headaches. Collins Gesa emphasizes collaboration rather than punishment, framing taxation as a shared responsibility between government and business.

5. A Cultural Shift Toward Compliance: Tax evasion once thrived in the shadows of a cash economy, but the digital paper trail changes the game. Compliance will rise not because penalties will grow harsher, but because underreporting will no longer be easy or safe. The bigger achievement, Gesa suggests, is cultural: building a modern state where paying tax is part of the national identity.

Vanuatu e-Invoicing: An Old Problem, A Modern Fix

For decades, Vanuatu’s tax structure has leaned heavily on self-assessment. Businesses were expected to keep tidy records and file truthful VAT returns. In theory, this was straightforward. In practice, in a nation where the informal sector dwarfs the formal economy, compliance was more guesswork than science. Receipts were optional, record-keeping uneven, and cash, untraceable, pliable, and ever-present. The result was predictable: government coffers ran short while a hidden economy thrived.

“We have a very small formal system compared to what we have in the informal system, which is a very huge sector,” Gesa explains. His words carry the candor of someone who has spent years watching public finances bleed out in silence. But unlike many of his peers in larger nations, Gesa did not have the luxury of waiting. Vanuatu does not levy personal income tax. VAT is its lifeline. “VAT predominantly is one of our broad-based taxes,” he says. “It has contributed very significantly in the billions… and the government will continue to rely heavily on it.” Now, it is obvious that the challenge was no longer simply about plugging leaks. It was about reforming the entire pipeline.

Borrowed From Neighbors, Tailored at Home

If you want to understand Vanuatu’s confidence in its new approach, you need only look around the region. Fiji and Samoa have already rolled out similar systems based on DTI’s Taxcore technology. Their early experiments, the hiccups and the breakthroughs, became lessons written in real time for Port Vila to study.

“We have learned quite well from our neighboring countries,” Gesa says, though he is careful to add that imitation was never the goal. The trick was to absorb what worked, skip what failed, and write rules that reflected the nation’s own quirks. “We firmly believe that whatever is done in our context… has to be tailor-made, it has to be customized to suit our own local context.”

That tailoring is where the partnership with DTI has flourished. Unlike many international consultancies that arrive with cookie-cutter solutions and leave with invoices, DTI has been unusually present. Gesa drops names, Imre, Maya, Luka, with the familiarity of colleagues, not contractors. “You guys have given us that confidence, that level of confidence and professionalism,” he says, describing a relationship that, by his account, has been “very positive” and “very promising.”

The collaboration has been powered by a dedicated local project team, a rare hybrid of domestic oversight and international expertise. The result is a system that fits Vanuatu’s peculiar e-invoicing needs, a tax net designed for an archipelago where some transactions still happen in market huts beside the sea.

Vanuatu e-Invoicing: What VSMS Actually Does

On paper, VSMS sounds like a bureaucrat’s dream: a system that records every VAT transaction in real time, creating an electronic paper trail. In practice, it means this: the next time a customer buys a meal, a ferry ticket, or a basket of taro in a participating business, the receipt issued is far more than a slip of paper. It is an e-invoice, logged instantly into the system.

For the government, the advantages are obvious. No more waiting for quarterly filings to discover discrepancies. The data arrives live, sharp, and undeniable. “The government needed to move from a patchwork of manual and semi-automated processes to what I call a full-fledged digitized solution,” Gesa says.

For businesses, the benefits are subtler but no less real. Record-keeping, once a tedious, error-prone chore, becomes automatic. Filing VAT returns becomes less about scrambling through shoeboxes of receipts and more about reconciling data already in place. In a country where small and medium enterprises are the backbone of the formal sector, the reduction in paperwork is not trivial.

“Tax should be seen as everybody’s business,” Gesa insists, signaling that the rollout is not meant to be punitive. His approach to the private sector is almost parental: firm but supportive. “We have to be seen in this process as partners… working together to make sure they do understand their obligations and they are doing what is right and what is legal.”

A Phased Rollout, Island by Island

Vanuatu’s geography makes even modest reforms a logistical puzzle. Spreading a digital tax system across six provinces means threading technology through islands where travel can depend on the tides, and where internet connectivity can sputter like a kerosene lamp.

To manage this, the rollout is deliberate, starting with Shefa Province, home to Port Vila. “It is a complex undertaking,” Gesa concedes, though not with the resignation of a man beaten down by obstacles, but with the satisfaction of one who has already started to bend them to his will.

Each phase brings not only new businesses into the system but also new lessons on how to train, communicate, and adapt. The system may be digital, but the rollout is unmistakably human. conversations with business owners, workshops, site visits, and trust-building exercises that stretch from the capital to remote villages.

Vanuatu e-Invoicing: The Promise of Data

What excites Gesa most, though, is not the paperwork saved, or the errors avoided. It is the data itself. “It’s a confirmation for Vanuatu of moving from a manual world of doing business… to a full-fledged journey,” he reflects.

Obviously, for a country with limited resources, data is the real currency. With it, policymakers can predict revenue flows, plan budgets more accurately, and even negotiate better with international lenders and donors. For the first time, the Ministry of Finance will not be guessing at the size of its economy. It will see it, receipt by receipt, transaction by transaction.

And with that visibility comes something far rarer in tax administration: trust. Citizens and businesses alike can see a government not groping in the dark but acting with knowledge. In a small nation, that shift matters.

Betting Big for a Small Nation

For a country often wrongly overlooked on the world stage, Vanuatu’s e-invoicing experiment is striking in its ambition. Larger economies have struggled for decades with digital tax reforms, often drowning in bureaucracy, lobbying, and political gridlock. Vanuatu, by contrast, has moved with a clarity born of necessity.

The stakes are enormous. Billions of vatu ride on the system’s success. Schools, clinics, roads, and ports all depend on it, especially after the large earthquake that recently shook the country. And yet, as Gesa tells it, the decision to take the leap was less about daring than about survival. Without VAT, there is no meaningful revenue base. Without accurate VAT collection, there is no fiscal future. “It’s a large bet for a small nation,” he concedes, his voice steady, his conviction firm. “But it is a bet we are making with clear eyes.”

Of course, tax evasion is as old as taxation itself, but in Vanuatu, e-Invoicing digital paper trail is already changing the calculus. A business owner who once relied on underreporting cash sales now will face an uphill battle against a system that registers each transaction as it happens.

The deterrent effect is quiet but powerful. Compliance rises not because penalties loom larger, but because cheating suddenly looks harder, riskier, and perhaps most importantly, out of step with the new norm. That, Gesa suggests, may be the greatest achievement of all: not just more money in the treasury, but a cultural shift toward paying tax as a shared responsibility.

Vanuatu e-Invoicing: Becoming a Modern State

From the outside, Vanuatu’s move might look like a modest tax reform. To those inside the Ministry of Finance, it feels closer to a cultural reset, a chance to drag a fragmented system into the 21st century and prove that even a nation of scattered islands can build a modern state.

As it has just been legislated, the e-invoicing project has not yet reached every business, nor has it closed every gap. But the momentum is unmistakable as the VSMS is starting its path. The confidence between the ministry and DTI remains high, the early project development results is encouraging, and the sense of national ownership is strong. As Gesa leans forward, his final words sound less like a bureaucrat’s talking points and more like a promise: “The relationship momentum is very high. The confidence is very high. We are moving from a manual past into a digital future. And that is the confirmation we need.”

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Our participation in the CATA conferences has become a valued tradition within our organization, one that we are proud to continue. Having attended on several previous occasions, we remain committed to maintaining our presence and supporting the event.

The CATA conferences provide a valuable platform for staying informed about the latest developments in fiscalization. Bringing together leading experts in tax system modernization and digital transformation, the event offers a unique opportunity to exchange insights and explore emerging trends in the field.

Significant Milestone Achieved

However, what sets this year’s conference apart from previous editions is a significant milestone: for the first time, the Heads Meeting is being held as a separate program from the Technical Conference. This distinction is particularly important, as the clearly defined agendas allow participants to better navigate and focus on either technical matters or policy-related discussions. Leaders and delegate alike warmly received this change, as it promises to enhance the overall experience and foster more meaningful engagement from all attendees.

Keeping with tradition, the host country opened the conference with welcoming remarks delivered by the Commissioner General of the Internal Revenue Commission (IRC), Mr. Sam Koim. He warmly welcomed delegates and emphasized the significance of hosting the event in Papua New Guinea. This year’s conference had the theme: “Aligning Global Standards with Local Solutions: Evolving Tax Systems in the Digital Age.”

Key Takeaways from the CATA Conference

Strong collaboration and dialogue are essential: The conference provided a valuable opportunity to strengthen relationships among tax leaders from across the Commonwealth. It fostered meaningful dialogue on the future of tax administration in an increasingly dynamic and evolving global environment.

The focus is on innovation and digital transformation: A central theme throughout the conference was the role of innovation and emerging technologies in modernizing tax administration. Key discussions focused on the use of blockchain, real-time predictive data, and advanced analytics to enhance revenue collection, as well as the application of AI, automation, and personalized services to improve the overall taxpayer experience.

Regional collaboration is of paramount importance: Analyzing and drawing lessons from the fiscalization experiences of other countries in the region is essential for avoiding common pitfalls and ensuring a smooth, effective implementation. Throughout the discussions, participants emphasized the importance of peer learning and highlighted the need to develop tailored approaches that reflect each country’s specific context and needs.

How to best integrate global tax standards into national systems: Achieving alignment between global tax norms and local needs requires strong peer learning and regional collaboration. Participants also cautioned against an overreliance on international standards without proper adaptation, emphasizing the importance of contextualizing global frameworks to fit each country’s unique economic, legal, and administrative landscape.

Our Contribution to the Conference

Data Tech International proudly participated in CATA’s working group sessions under the theme “Harnessing Innovative Technologies for Revenue Growth: Bridging Strategy and Practice.” During these sessions, leaders from across the Commonwealth, such as Papua New Guinea, Fiji, Nigeria, or Malaysia, exchanged ideas, issued key recommendations, and defined follow-up actions. Among the most important topics discussed, the following stood out:

• Technology alone is not sufficient: Policy objectives must be aligned with the use and implementation of new technology. Technology goes hand in hand with improving taxpayer service and organizational reform (including a broader tax policy reform).
• Unitary invoicing is a powerful tool: To eliminate invoice fraud and improve VAT compliance, the buyer, the seller, and the tax authority must be simultaneously linked at the point of transaction.
• Local adaptation is the key to success: A successful implementation depends on local adaptation; systems need to be and remain relevant and accessible to both taxpayers and frontline staff equally.
• Flexible regulations over rigid ones: Experience proves that adaptive regulations, open to the idea of leaving room for local innovation and vendor participation, are more beneficial than prescribing specific devices or technical standards.
• International collaboration, strongly advised: Using learning platforms to exchange implementation experiences positively contributes to increasing regional leverage.
• Future topics to explore together: Leaders agreed that conducting maturity assessments, launching regional digital transformation clinics, improving collaboration with tech industry leaders, or enhancing digital tax policy frameworks are important milestones to achieve by the end of this year and the beginning of the next.

Final Word

We consider the 45th CATA Conference to be a great success, having brought together representatives from over 30 member countries. In addition to this strong participation, the event also welcomed delegates from key international and regional organizations, including the OECD, IBFD, IMF, World Bank, CIAT, PITAA, and WATAF.

This level of engagement reflects the deep commitment and collaboration among CATA’s leadership and partners. It also highlights the significant efforts made in the planning, organization, and coordination of the conference — efforts for which we are sincerely grateful.

From our perspective, this year’s CATA Conference could not have been more timely. The Pacific region is currently experiencing a significant wave of new fiscalization implementations, making the conference especially relevant. Notably, in Vanuatu and Papua New Guinea, DTI is preparing to deploy its TaxCore solution, aimed at making tax collection and compliance more streamlined, efficient, and technologically advanced than ever before.

DTI is proud to have contributed to the Commonwealth’s ongoing discussions by sharing its expertise in the field. We remain committed to strengthening our relationships with new and existing stakeholders while continuing to consolidate our presence in the region, a region that has always been, and continues to be, of strategic importance to us.

The post DTI invited to present at the 45th CATA Annual Heads Meeting appeared first on Dti.

The Vision and the Path Forward

The Vanuatu Sales Monitoring System (VSMS), driven by TaxCore®, embodies a visionary leap forward towards tax compliance. It leverages secure, encrypted invoices transmitted automatically from accredited Electronic Fiscal Devices (EFDs) to DCIR. This infrastructure facilitates real-time synchronization, monitoring, and auditing, significantly boosting transparency and tax compliance.

Strategic Recommendations

Drawing on our global expertise, we’ve proposed targeted recommendations to secure the project’s success:

• Legislative Preparations: Finalizing regulations and ensuring they harmonize with existing legal frameworks.
• Data Quality Initiatives: Launching a taxpayer registry cleanup campaign.
• Risk-based Implementation: Prioritizing implementation in high-revenue areas.
• Compliance Task Force: Establishing a dedicated compliance and audit team within DCIR.
• Public Awareness Campaign: Rolling out a comprehensive, multilingual communication strategy.
• Support for POS Upgrades: Offering technical support for businesses to upgrade their point-of-sale infrastructure.
• Enhanced Regional Support: Establishing regional enrollment centers.
• Accessible Web and Mobile Solutions: Providing free invoicing solutions optimized for local infrastructure.
• Customer Compliance Incentives: Introducing the Customer Compliance Award to encourage consumer participation.

Hon. Johhny Koanapo Rasou, Vanuatu’s Minister of Finance and Goran Todorov, DTI’s CEO

Infrastructure and Legislative Preparedness

The successful implementation depends heavily on digital infrastructure readiness and clear legislative support. With digital signatures and secure recordkeeping backed by TaxCore®, VSMS will meet stringent standards outlined in Vanuatu’s Electronic Transactions Act and Tax Administration Act, enhancing enforceability and compliance.

Taxpayer Compliance and Behavioral Change

Observations from previous monitoring exercises indicate taxpayers respond positively to active oversight. VSMS provides proactive, continuous verification, significantly improving detection and reduction of tax evasion and fraudulent activities.

Final Thoughts

Our project with DCIR involves capacity building and implementing VSMS, powered by TaxCore®. By fostering transparency, securing revenues, and enabling fair market competition, this system positions Vanuatu’s tax administration among the most progressive globally.

We at DTI are committed to this transformative journey, confident in VSMS’s ability to create lasting benefits for the government, businesses, and citizens of Vanuatu for years to come.

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