The Federal Inland Revenue Service (FIRS) has announced that it will soon initiate the pilot phase of its planned electronic invoicing and electronic valuation solutions.
In the meantime, the agency has begun engaging with stakeholders regarding the proposed e-Invoicing and e-Valuation initiative, which is a significant effort aimed at transforming digital taxation in Nigeria.
The FIRS stated that these advancements are intended to improve tax administration, enhance compliance, and promote transparency by utilizing technology to effectively monitor and assess taxable goods and services.
During a stakeholders’ engagement meeting held in Lagos yesterday, Amina Ado, Coordinating Director of the Large Tax Group, represented by Dr. Olabode Olatunji, Director of Large Tax, Telecoms, and Financials emphasized the transformative capabilities of the National E-Invoicing Solution.
She described the initiative as a strategic step toward fostering efficiency, transparency, and accountability in tax administration.
She says today's meeting's a great chance to talk, work together, and share ideas while we test this new system. The e-invoicing system isn't just new tech; it's a key part of following global best practices, making tax compliance easier, stopping tax loss, and making business easier in Nigeria.
The pilot phase will begin with a select group of large taxpayers, with the insights gained to inform broader implementation across various sectors. Ado noted, “Through comprehensive presentations, discussions, and expert insights, we will examine how this solution can be integrated into your business operations and the overall tax ecosystem.”
Recognizing the potential challenges associated with transitioning to a new system, she assured stakeholders of the FIRS’s commitment to providing the necessary support and guidance to facilitate a smooth adoption process for all involved.
In a media briefing, Mr. Tayo Koleoso, Chief of Staff to the FIRS Executive Chairman, highlighted the agency's commitment to taxpayer engagement. He explained that the implementation of the new electronic invoicing system, also known as the merchant buyers' service solution, is designed to facilitate collaboration with major taxpayers to ascertain their needs as the agency transitions to Tax Administration Solution 3.0.
He stated the FIRS is in an era of Digital Transformation, which he tagged as 3.0 to make lives easier for all taxpayers, by providing an integrated system that works for both taxpayers and tax collectors.
He said, “We are here to discuss, deliberate and consult about our digitalisation approach. The journey started from tax 1.0, which was paper based. We moved into tax administration 2.0 globally, which was more digitised. From tax administration 2.0, we are fully automated.
“Every day, you find out that new models, new innovations are being added but the ultimate goal is to go into. 3.0. At 3.0 where people are moving globally, you find out that it becomes part of your natural business operation, especially for the large taxpayers, SMEs, where even from your resource planning system, POS system, everything becomes integrated and much more seamless.”
Also, Loveth Onanuga, the director of taxpayer services at FIRS, emphasized that the introduction of e-invoicing is expected to minimize errors and inaccuracies in taxpayer reporting.
“We’re doing our pilot with our largest tax payers because they have the largest ERP systems and transactions,” Ms Onanuga stated. “We want to capture them first and make sure that we get it right before we move down to our medium tax payers and the small tax payers.”
She further noted that all taxpayers enrolled in the system will have the capability to report transactions in real-time, providing FIRS with immediate visibility into all transactions, whether conducted online or offline.
This approach, she highlighted, will eliminate any disputes between taxpayers and tax authorities regarding the amount of taxes owed.
The rollout of this initiative is in accordance with the Tax Administration and Enforcement Act of 2007.
An electronic invoice is a machine-readable document that is exchanged between a buyer and a supplier in a structured data format, allowing for automatic and electronic processing while remaining digital throughout its lifecycle.
The technology utilizes the BIS Billing 3.0 UBL standard to facilitate the seamless exchange of e-invoices across various platforms, thereby enhancing business operations and ensuring tax compliance across the country.