The Federal Inland Revenue Service (FIRS), backed by the Finance Acts, and now more specifically, by the Nigeria Tax Reform Acts, has announced a major shift in how businesses are to record and report their transactions – the nationwide adoption of electronic invoicing (e-invoicing).
From 1 January 2026 (that is, effective date of the Tax Reform Acts), it is expected that all taxable persons, regardless of size, must begin using the FIRS (soon to be the Nigerian Revenue Service – NRS)-approved e-invoicing system to issue, submit, and validate invoices.
This digital reform follows the earlier phased rollout for large taxpayers (earning ₦5 billion and above annually) who were scheduled to start implementation from 1 July 2025. With the formal legal framework now in place, the use of paper-based invoices will no longer be compliant from January 2026.
What Is E-Invoicing?
E-invoicing is the process of issuing and transmitting invoices in a structured digital format. Unlike scanned or emailed paper invoices, an e-invoice is generated electronically from a business’s ERP or accounting system, submitted through an Access Point Provider (APP), validated, and digitally signed by FIRS /NRS, and returned with a QR Code and Cryptographic Stamp Identifier (CSID) for authenticity.
Legal Mandate and Penalties
The Nigeria Tax Administration Act (2025) and the Nigeria Tax Act (2025) explicitly require businesses to fiscalise their transactions via an approved Electronic Fiscal System (EFS). Key provisions include:
Section 23 (Nigeria Tax Admin Act): Any person making a taxable supply must use the EFS to record and report transactions. FIRS / NRS will define and issue regulations for its implementation.
Section 158 (Nigeria Tax Act): Fiscalisation systems include software, devices, and communication networks approved by FIRS/ NRS.
Section 103 (Nigeria Tax Admin Act): Failure to allow the tax authority to deploy its technology within 30 days of notice will attract a ₦1 million penalty for the first day and ₦10,000 for each subsequent day.
Section 104 (Nigeria Tax Admin Act): Failure to process taxable supplies through the fiscalisation system results in a ₦200,000 penalty + 100% of tax due + interest at the prevailing CBN MPR.
How E-Invoicing Works
For Business-to-Business (B2B): – Supplier issues invoice via e-invoicing solution – Invoice is submitted to FIRS through an APP – FIRS applies a digital stamp and returns a validated invoice – Buyer receives it via their access point, completing the chain with no human interaction.
For Business-to-Customer (B2C): – Supplier issues invoice/receipt with a QR code at point-of-sale – All receipts are submitted to FIRS within 24 hours – Customers can validate invoices using the MBS360 app.
What Does This Mean for Nigerian Businesses?
This transition has far-reaching implications for taxpayers, especially those used to more flexible and informal invoicing processes.
Pros:
- Improved accuracy in tax reporting by automating VAT calculations and record keeping
- Reduced audit risk as validated invoices are already reviewed by FIRS
- Quicker access to financing through invoice factoring — banks can now verify invoice authenticity instantly
- Faster VAT claims processing as both input and output VAT are digitally recorded
Cons / Challenges:
- Higher setup and compliance costs: Costs of ERP system upgrades, integration with APPs, SI engagement, and staff training
- Compulsory adoption of digital systems: Businesses must now use approved software and possibly fiscal hardware to issue and report invoices- posing a major shift for those using manual or informal methods
- Reduced room for tax avoidance: Businesses that previously underreported sales may now face higher tax bills
- Enforcement penalties: Failing to register or integrate in time may attract steep daily penalties and interest charges
- Data exposure and oversight: Businesses will have to submit transactional data to the government in real-time or near real time (but within 24 hours), raising concerns about regulatory visibility
Steps to Comply
- Check your readiness
- Does your business use an ERP or accounting system that can generate structured invoice data?
- Do you have internal capacity for API integrations or need a service provider?
- Register on the FIRS e-invoicing portal
- Visit: einvoice.firs.gov.ng/enablement
- Select your Access Point Provider (APP)
- Choose a reporting model (real-time or near real-time)
- Configure your system
- Engage a qualified ERP professional or System Integrator (SI) to align (and integrate) your system with FIRS e-invoicing
- Obtain your digital certificate, secret key, and business ID from FIRS
- Start issuing e-invoices
- Every invoice must follow FIRS schema and pass validation
- B2C receipts must carry QR codes and be reported within 24 hours
How We Can Support You
At Vi-M Professional Solutions, we are in the process of becoming a licensed System Integrator. While we are not yet authorized to perform full-scale integrations, we are well-positioned to help you begin your e-invoicing journey through:
- ERP & Invoicing System Assessment: We help you determine if your current tools, whether full ERPs, simple accounting software or even free invoicing apps – are ready for e-invoicing.
- Integration & Vendor Planning: We guide your selection of APPs and plan system configurations with your IT team and software vendors.
- Workflow Design & Testing: We support the design of compliant e-invoice processes and help simulate real-use test cases.
As the regulatory landscape evolves, we are committed to supporting your compliance transition with clarity, structure, and technical insight.
Conclusion
The move to e-invoicing represents a significant shift in Nigeria’s fiscal landscape. For tax-compliant businesses, this may streamline compliance. For others, it marks the end of opacity. Whether you see this reform as a challenge or an opportunity, preparation is key. The time to act is now.
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