As part of its broader effort to modernize tax administration and close revenue gaps, the Federal Inland Revenue Service (FIRS) has announced the phased implementation of an electronic invoicing (e-Invoicing) system in Nigeria, known as the FIRS Merchant Buyers’ Service Solution (FIRSMBS). The rollout, beginning July 2025, will initially target large taxpayers (i.e., companies with annual turnover of N5 Billion and above), with plan to expand to other taxpayer categories in subsequent phases.
This regulatory development aligns with Nigeria’s National Digital Economy Policy and Strategy (2020–2030) which aims to enhance tax transparency, improve efficiency in VAT collection and reduce revenue leakages through digital transformation and automation.
What Is FIRSMBS?
The FIRSMBS platform is designed to bridge taxpayers’ internal invoicing systems with the FIRS infrastructure. This integration is intended to give the tax authority real-time access to transaction data, reduce tax leakages, and simplify VAT monitoring. The solution offers businesses a secure, real-time mechanism for creating, validating, and transmitting invoices electronically. It also aims to standardize invoice formats, ensuring consistency and reliability in tax submissions.
Key Highlights of the E-Invoicing Framework
- The e-Invoicing mandate will apply to Business-to-Business (B2B), Business-to-Government (B2G) and Business-to-Consumer (B2C) transactions, integrating with enterprise systems through Application Programming Interface (APIs) or National Information Technology Development Agency (NITDA) approved Access Point Providers (APPs).
- The B2B/B2G invoices must be pre-cleared with FIRS and must carry a unique Invoice Reference Number (IRN) and Cryptographic Stamp Identifier (CSID). The B2C invoices must be reported within 24-hours and include a QR code for validation.
- Taxpayers will access the FIRSMBS platform using their Taxpayer Identification Number (TIN) to create a digital profile. Once onboarded, businesses can generate invoices through the portal. Each invoice will contain standardized information such as supplier and buyer details, item descriptions, quantities, pricing, tax breakdowns, and total amount.
- Invoices must be transmitted to the FIRS for validation in real time or shortly before being shared with the customer. To be accepted, the e-invoice must include essential fields such as transaction type, parties’ names and VAT registration numbers, tax amounts, and the total value. All validated invoices must be submitted within 21 days of generation.
- Implementation begins from July 2025 for large taxpayers while that of the medium and small businesses will be in subsequent phases and based on the feedback from the initial roll out.
Read more: National Repository Portal and Financial Reporting Compliance: A Guide for Nigerian PIEs
Why E-Invoicing?
The shift to e-invoicing is not just a technological update; it represents a transformation in how businesses transact, comply with tax laws, and engage in cross-border trade. Key advantages include:
- Faster Tax Reporting: Accelerates the invoicing process, resulting in timely and accurate VAT filings.
- Reduced Costs and Errors: Automation eliminates manual processes and minimizes invoicing errors, improving data integrity.
- Streamlined Operations: Electronic systems reduce paperwork and facilitate easier reconciliation and recordkeeping.
- Regulatory Compliance: Ensures adherence to uniform invoice standards, aiding in audits and reducing disputes.
- Sustainable Practice: Reduces paper usage and aligns with environmental best practices.
- System Interoperability: Enables seamless communication between businesses' ERP systems and the FIRS platform, fostering digital integration.
How can we support you?
We understand that compliance transformations require more than just systems upgrades; they require strategic alignment. Our team is equipped to support your business through:
- E-invoicing readiness assessments
- System integration support
- Policy and process design
- Staff training and compliance advisory
The implementation of E-invoicing by the FIRS signals a clear direction toward a data-driven, digitally enabled tax system in Nigeria. While the changes may appear daunting at first, businesses that prepare early will be better positioned to realize operational efficiencies and maintain compliance.
We encourage you to reach out to us at [email protected] as you begin navigating this transition.
