Digital Tax Revolution: FIRS Introduces Electronic Invoicing System for Optimal Tax Management in Nigeria
Nigeria's Federal Inland Revenue Service (FIRS) Launches Electronic Invoicing Solution
The Federal Inland Revenue Service (FIRS) in Nigeria has launched a new electronic invoicing solution, the National E-Invoicing Solution (Merchant-Buyer Model), also known as the Electronic Fiscal System (EFS). This modern system is aimed at improving revenue collection and modernizing the tax administration system in the country.
Timeline
The rollout of the e-invoicing solution began with a voluntary pilot phase from November 2024 to June 2025. The initial mandatory rollout for large taxpayers, originally set for August 1, 2025, was extended to November 1, 2025, due to technical issues. These companies must have an annual turnover of at least ₦5 billion (approximately $3.1 million USD). Other taxpayers are expected to be included starting from January 2026.
Eligible Firms
The initial phase focuses on large taxpayers with an annual turnover exceeding ₦5 billion. Plans are underway to gradually include medium and other taxpayers in the e-invoicing obligation.
Partners Involved
The Merchant Buyer Solution (MBS) is the primary e-invoicing platform provided by the FIRS. It enables taxpayers to issue compliant e-invoices through the Electronic Fiscal System (EFS). The system involves integration with various access points and payment gateways to ensure real-time transaction monitoring and reporting.
Additional Details
The system includes B2B pre-clearance structured e-invoicing and B2C e-reporting, with a QR code provided for buyer validation in B2C transactions. FIRS emphasizes transaction monitoring and warns against concealing transactions, as all payments are reported through payment gateways.
FIRS has partnered with the National Information Technology Development Agency (NITDA) to incorporate service providers who will act as system integrators and help taxpayers with the onboarding and transmission process.
MTN Nigeria was the first company to successfully transmit a live electronic invoice through the MBS platform. Other major firms such as Huawei Nigeria and IHS Nigeria are preparing to follow suit. Within the first two weeks of its launch, 1,000 of the 5,000 eligible firms (20%) had already begun integrating with the FIRS MBS platform.
The MBS system ensures the authenticity, accuracy, and completeness of invoices. It is designed to provide FIRS with real-time visibility into commercial transactions, aligning with global best practices and supporting the Federal Government's broader goals of modernizing tax administration, reducing tax evasion, and harmonizing revenue reporting. The three-month extension is intended to encourage voluntary compliance and ensure a smooth transition for all large taxpayers.
The National E-Invoicing Solution, implemented by Nigeria's Federal Inland Revenue Service (FIRS), involves the integration of technology with various access points and payment gateways, aiming to modernize the tax administration system and improve revenue collection. To support this, FIRS has partnered with the National Information Technology Development Agency (NITDA) and technology service providers who act as system integrators, helping taxpayers with the onboarding and transmission process.
