The Federal Inland Revenue Service (FIRS) has taken a significant step towards modernizing Nigeria’s tax administration by actively engaging key players in the oil and gas sector on the early adoption of the National E-Invoicing System. The move comes as Nigeria prepares to roll out the electronic invoicing system on July 25, 2025, with the goal of enhancing transparency, compliance, and efficiency in tax collection.
Electronic invoicing, commonly referred to as e-invoicing, is a digital method of generating, sending, and storing invoices in a structured electronic format that facilitates faster validation and processing by tax authorities. The Nigerian government, through FIRS, is implementing this system to streamline tax administration, reduce revenue leakages, and align with global best practices.
The oil and gas industry, one of Nigeria’s largest taxpayers and a significant contributor to national revenue, is being encouraged to adopt this technology early. Officials revealed during a stakeholder engagement session held in Lagos that the system is already operational, with several large taxpayers piloting the Merchant Buyers Solution (MBS) platform.
The MBS platform serves as the backbone of Nigeria’s e-invoicing infrastructure. It facilitates the real-time generation, validation, storage, and exchange of electronic invoices. Each invoice generated on the system receives a unique reference number, ensuring authenticity and enabling FIRS to monitor transactions as they occur.
This level of transparency is expected to significantly reduce common tax compliance issues, such as turnover suppression and invoice fraud. It will also provide a more accurate and real-time picture of business transactions for tax authorities, enhancing revenue collection efficiency.
At the Lagos engagement event, the Acting Director of Tax Automation at FIRS, Mike Adoga, outlined the progress made in deploying the e-invoicing system and the challenges encountered. He highlighted infrastructure demands, taxpayer education, and trust-building as key hurdles.
“Infrastructure is a challenge because we’ve had to forecast storage, server, and computing power needs. Considering the volume of transactions across sectors, the scale is enormous,” Adoga explained.
To overcome these challenges, FIRS is prioritizing continuous stakeholder engagement, training sessions, and infrastructural upgrades to ensure the system can handle the anticipated transaction volume at launch.
The initiative has received positive feedback from global consultancy firms. Ernst & Young (EY), one of the Big Four accounting firms, lauded Nigeria’s e-invoicing system, noting its alignment with international standards such as the Pan-European Public Procurement Online (PEPPOL) e-invoicing framework.
EY emphasized that Nigeria’s system incorporates a real-time pre-validation model, which enhances invoice authenticity and reduces errors before they are submitted to tax authorities.
In an exclusive interview at the engagement session, FIRS lead consultant on the MBS project, Sodiq Arogundade, confirmed that the system is fully ready and operational. “Several large taxpayers are already piloting the platform, with some poised to go live. We are committed to accommodating as many innovators and businesses as possible,” he stated.
Arogundade stressed that while the system goes live on July 25, its use is not yet mandatory. Businesses are encouraged to voluntarily integrate their operations with the platform to benefit from enhanced transparency and smoother tax reporting.
“There is no mandatory use at the moment. Businesses have the choice to enable their operations on the portal, and we believe many will embrace this opportunity,” he added.
Richard Kimeku, Director of the Technology Department at FIRS, elaborated on the broader implications of the e-invoicing project. He underscored that the system is not a payment platform but a transaction tracking tool that will help both businesses and the government.
“It will provide businesses with insights into purchasing trends and market behavior while enabling FIRS to accurately assess tax liabilities. The transparency it offers will mitigate issues like turnover suppression,” Kimeku said.
By capturing transactional data in real-time, FIRS anticipates a significant reduction in tax evasion and fraud. The system will also improve the ease of doing business in Nigeria by providing a more predictable and standardized invoicing process.
The adoption of e-invoicing in Nigeria represents a major milestone in the country’s digital transformation agenda. By harnessing technology, FIRS aims to broaden the tax base, increase compliance rates, and improve overall revenue generation, which is critical to funding public services and infrastructure development.
For the oil and gas sector, early adoption means aligning with emerging regulatory standards, reducing audit risks, and enhancing corporate governance. The transparency provided by e-invoicing will help restore investor confidence and facilitate smoother business operations.
With the July 25 rollout approaching, businesses, especially in the oil and gas sector, are advised to begin integrating their invoicing systems with the MBS platform. Early adoption will not only ensure compliance when the system becomes mandatory but also allow companies to troubleshoot potential integration issues in advance.
FIRS has committed to ongoing support through workshops, training, and stakeholder meetings to ease the transition for all taxpayers.