FIRS to commence pilot phase of e-invoicing with large taxpayers

The Federal Inland Revenue Service (FIRS) has engaged stakeholders on its proposed e-invoicing e-valuation solution, with the pilot phase set to begin with selected large taxpayers.

According to FIRS, an electronic invoice (e-invoice) functions as a machine-readable digital document that enables automated processing by the recipient’s accounting systems.

In September 2024, FIRS announced it will introduce an e-invoice to improve the tax system in Nigeria.

In her welcome address during stakeholders’ engagement on Tuesday, Amina Ado, coordinating director of FIRS, said the national e-invoicing solution has transformative potential.

Ado, who was represented by Olabode Olatunji, director of large tax, telecoms, and financials, described the initiative as a strategic step towards fostering efficiency, transparency, and accountability in tax administration.

She said the innovation seeks to enhance tax compliance and revenue collection in Nigeria by leveraging technology to accurately monitor and evaluate taxable goods and services.

“Our engagement today serves as an important platform for dialogue, collaboration, and shared insights as we navigate the pilot rollout of this solution,” she said.

“The e-invoicing system is not just a technological innovation but a strategic enabler that aligns with international best practices, ensuring seamless tax compliance, reducing revenue leakages, and enhancing the ease of doing business in Nigeria.”

‘PILOT PHASE TO COMMENCE WITH LARGE TAXPAYERS’

Ado said the pilot phase will start with selected large taxpayers, and insights gained will guide broader implementation across various sectors.

“Through detailed presentations, discussions, and expert insights, we will explore how this solution integrates into your business operations and the tax ecosystem at large,” she said.

Ado acknowledged that FIRS might encounter challenges in transitioning to a new system, but she noted that the agency remains committed to providing necessary support and guidance for a seamless adoption process for all stakeholders.

Also speaking during the meeting, Tayo Koleoso, chief of staff to the executive chairman of FIRS, said the agency focuses on engaging taxpayers.

“As we start this new innovation of deploying an electronic invoice, also called a merchant buyers’ service solution, the idea is to meet with large taxpayers and understand their requirements as we continue our journey into what we call Tax Administration Solution 3.0,” he said.

Koleoso added that the system integrates with electronic reporting, point of sales (POS) systems, and cloud solutions to enhance efficiency and enable better data exchange between businesses and tax administration.

“This innovation provides more data for businesses to make intelligent decisions and for the country to shape fiscal and monetary policies,” he said.

Sadiq Arogundade, founder and product lead of D’Accubin Technology Limited, emphasised that the national e-invoicing solution, developed locally by his firm, complies with international data protection and invoice interchange standards.

“We built this in-house, ensuring it aligns with global best practices,” he noted.

Arogundade added that the solution follows global standards and utilises the “BIS Billing 3.0 UBL standard for seamless exchange of e-invoices across platforms, which is expected to streamline business operations and tax compliance nationwide.

UBL format allows companies worldwide to exchange electronic documents in the same language.