Briefing document & Podcast: E-Invoicing and E-Reporting in Nigeria

Summary

Nigeria has embarked on a significant digital transformation of its tax administration with the introduction of a comprehensive e-invoicing and e-reporting framework. This mandate, primarily managed by the Federal Inland Revenue Service (FIRS), now renamed the Nigeria Revenue Service (NRS), aims to enhance VAT compliance, curb revenue leakages, and modernize the country’s tax system. The system requires electronic documentation for virtually all VAT-liable transactions, utilizing a clearance model for Business-to-Business (B2B) and Business-to-Government (B2G) invoices, and a near real-time reporting model for Business-to-Consumer (B2C) transactions. The initiative is supported by robust legislation and technical standards aligning with global best practices, notably the use of the Universal Business Language (UBL) schema.

1. Scope of the Mandate

The e-invoicing mandate, known as the FIRS Merchant Buyer Solution (MBS), has a broad scope covering most transactions by VAT-registered entities in Nigeria.

• Comprehensive Transaction Coverage: All VAT-liable transactions by businesses, including domestic B2B, B2C, and B2G sales, must be documented with electronic invoices. These “structured digital invoices” replace traditional paper or unstructured invoices and must be generated and transmitted via the government-approved electronic invoicing platform (FIRS MBS/Electronic Fiscal System) for validation and reporting.
• Cross-Border Transactions: The mandate extends to cross-border transactions involving Nigeria. Non-resident companies selling taxable goods or services to Nigerian customers and registered for VAT in Nigeria must issue FIRS-compliant e-invoices. Exports from Nigeria (zero-rated for VAT) also fall under the system for proper documentation.
• Relationship to CBN Trade Invoicing: It is crucial to distinguish the FIRS e-invoicing from the Central Bank of Nigeria’s (CBN) separate e-invoicing requirement for all import and export transactions exceeding USD 10,000, effective February 1, 2022. While both aim at electronic documentation, the CBN’s system focuses on curbing under-valuation in trade invoices, whereas FIRS MBS is primarily for VAT and tax compliance.
• Special Cases: As of current guidance, Nigeria does not have explicit deviations for self-billing, triangulation, or special EU-style VAT regimes. Any supply involving a Nigerian VAT-registered supplier or buyer must comply with e-invoicing obligations if it constitutes a taxable supply. Fully VAT-exempt supplies are generally outside the e-invoicing requirement.

2. Taxable Persons in Scope

The mandate covers a wide range of entities with some exemptions based on turnover and type of entity.

• Resident Businesses: All companies and persons “established” in Nigeria and registered for VAT are in scope. This includes corporate entities, registered business names, and VAT-registered individuals making taxable supplies.
• Non-Resident & Foreign Entities: Non-established companies registered for VAT in Nigeria (e.g., providers of digital services) are also required to comply.
• Exemptions and Thresholds: Small Businesses: Enterprises with annual turnover below the VAT registration threshold (₦50 million as of 2025 reforms) are not obliged to register for VAT and thus are outside the e-invoicing requirement.
• Government Entities & Diplomats: Generally not required to charge VAT as suppliers, thus not directly in scope. However, B2G invoices issued to government by taxable vendors are in scope.
• CBN Trade Exemptions: Specific imports/exports below USD 10,000 or by certain entities (e.g., security agencies, diplomatic missions) are exempt from CBN’s e-invoicing, but this does not broadly impact the FIRS VAT e-invoicing obligation.
• Voluntary Participation: Before mandatory phases, FIRS conducted a pilot program, and voluntary early integration is allowed and encouraged for other taxpayers.

3. Implementation Timeline

The rollout of Nigeria’s e-invoicing and e-reporting framework has been staged from 2022 to 2028.

• February 2022: CBN initiated e-invoicing for all import and export transactions.
• Late 2024: FIRS launched a pilot of the domestic e-invoicing system (MBS) with select large companies. The “National Regulatory Guideline for Electronic Invoicing in Nigeria 2025” was issued by NITDA, and the Nigeria Tax Administration Act 2025 (NTAA 2025) solidified the legal framework, empowering FIRS (now NRS) to mandate e-invoicing and imposing penalties from January 1, 2026.
• Mid-2025: Mandatory e-invoicing for “large taxpayers” (annual turnover ≥ ₦5 billion) was initially set for August 1, 2025, but later extended to November 1, 2025. Enforcement of penalties began from January 2026.
• 2026–2028 (Phased Expansion):Medium Taxpayers (turnover ₦1 billion to ₦5 billion) will start pilot onboarding in 2026, with mandatory go-live by July 2026 and enforcement from early 2027.
• Emerging and Small Taxpayers (turnover below ₦1 billion) are slated to begin integrating in 2027, with full compliance enforcement by 2028.
• Current Status (2026): “the large taxpayer phase is substantially underway, with most large companies onboarded and successfully transmitting e-invoices to the MBS platform.” The focus is now on mid-sized companies.
• Grace Periods: FIRS has provided grace periods and pilot programs to facilitate adjustment, but “no long-term exemption from e invoicing is planned for any category.”

4. Technical & Functional Requirements

The Nigerian system demands a highly structured and secure approach to e-invoicing.

• Standardized E-Invoice Format: Nigeria has adopted the Universal Business Language (UBL) schema, specifically the Pan-European PEPPOL BIS 3.0 standard, as the basis for its e-invoice data format. E-invoices will be generated in XML or JSON structures conforming to UBL.
• Mandatory Data Fields: E-invoices are “rich in content, with sources indicating approximately 55 mandatory data fields.” These include supplier/buyer TIN and details, unique invoice number, date, type (invoice, credit/debit note), transaction specifics (description, quantity, price, VAT rate, amount), tax breakdown, and HSN codes for goods.
• “All mandatory fields must be correctly populated to pass the platform’s validation – if even one required field is missing or incorrect, the invoice will be rejected by the system…”
• Unique Identifiers: Upon submission and validation, the platform assigns an Invoice Reference Number (IRN) and a Cryptographic Stamp Identifier (CSID), often represented as a QR code, ensuring unique identification and tamper-evidence.
• E-Reporting Data & Format (B2C): For high-volume B2C transactions, invoices do not require prior tax authority approval. Instead, they must be reported to the tax portal within a short timeframe (currently within 24 hours of sale). These B2C reports still require key data and a QR code for verification.
• System Architecture and Integration: Nigeria uses a centralized clearance model combined with a federated network. E-invoices are transmitted to the FIRS/NRS platform either via accredited third-party Access Point Providers (APPs) and System Integrators (SIs) or through direct API integration. This follows the PEPPOL “4-corner network” model.
• Transmission & Validation Workflow:B2B/B2G (Clearance Model): The supplier’s system transmits invoice data to the FIRS/NRS MBS platform before or at the time of invoice issuance. The platform validates, performs fiscal checks, assigns an IRN and CSID, and returns the cleared invoice to the supplier for delivery to the customer. This typically occurs in real-time or near real-time.
• B2C (Post-Audit Model): Businesses issue receipts immediately to consumers but must send the invoice data electronically to the FIRS system within 24 hours for official recording.
• Accredited Service Providers: NITDA guidelines outline criteria for accrediting APPs and SIs, who must meet technical and security standards.
• Digital Signatures & Integrity: The system mandates strong digital integrity controls. The FIRS system affixes a cryptographic digital signature (CSID) to cleared invoices, adhering to XAdES (for XML) or PAdES (for PDF) standards and leveraging ECDSA for signing, ensuring tamper-proof documents.
• Processing and Performance: The MBS platform operates 24/7, with B2B invoices typically cleared within hours. Provisions exist for connectivity outages, allowing submission once internet access is restored, but within a maximum 21-day window.

5. Correction of Errors

Errors on invoices are handled through specific electronic processes.

• E-Invoice Corrections (B2B/B2G): An invoice rejected during validation must be corrected and re-submitted. Once an e-invoice is cleared and issued an IRN/CSID, its details are locked. To correct a cleared invoice, a supplier must issue an electronic credit note or debit note, referencing the original invoice, and submit it through the e-invoicing platform for clearance.
• E-Reporting Corrections (B2C): Corrections for electronically reported B2C transactions involve submitting a corrected report or adjustment document, or issuing a corrected receipt/credit note and transmitting it through the portal. The principle is to promptly rectify errors via corresponding correcting entries.

6. Transmission & Workflow

• Submission to Tax Authority: All e-invoices (B2B/B2G) are transmitted to the centralized FIRS/NRS platform for clearance before being issued to the customer. The workflow follows a “four-corner” model where the supplier sends the e-invoice via an Access Point to the FIRS platform (as a clearance authority), which then forwards the validated invoice to the buyer’s Access Point.
• Deadlines and Frequency:B2B/B2G: Real-time or near real-time clearance is required. “an invoice to a business or government should be submitted to the FIRS platform before or at the moment of issuing it to the customer.”
• B2C: Must be reported electronically within 24 hours of issuance.
• Periodic Summaries: Not required, as individual invoices are captured. However, monthly VAT returns (Form 002) are still filed by the 21st of the following month and should reconcile with e-invoice data.
• Grace for Exceptional Cases: A maximum window of 21 days from the invoice date is allowed for all invoices to be reported in cases of technical difficulties.

7. Self-Billing

While not explicitly detailed, self-billing (where the buyer issues the invoice) is expected to comply with the e-invoicing mandate. If practiced, self-billed invoices must be generated and reported through the e-invoicing system by the buyer, obtaining an IRN and digital signature, and should clearly indicate they are “Self Billed Invoice” in the UBL format.

8. Triangulation & Special Scenarios

• Triangulation: No distinct provisions exist. Each leg of a chain transaction involving a Nigerian VAT-registered entity requires an e-invoice.
• Cross-Border Reverse Charge: For imports of services/goods from non-VAT-registered foreign suppliers, Nigerian businesses continue to self-account for VAT via reverse charge on their VAT return. The e-invoicing system does not mandate a pseudo-invoice for such cases, focusing instead on sales invoices issued by suppliers. However, if a foreign supplier is VAT-registered in Nigeria, they must issue a Nigerian e-invoice.
• Zero-Rated & Exempt Supplies: Zero-rated supplies (e.g., exports) are taxable at 0% VAT and must be issued as e-invoices. Exempt supplies (not subject to VAT) generally do not require e-invoices through the system.

9. Archiving & Retention

• Electronic Archiving Requirements: E-invoices and related records must be retained for audit purposes, typically 5-6 years, though some guidance suggests up to 10 years, especially for cross-border transactions. NITDA guidelines mandate secure archiving on servers located within Nigeria to ensure local access for authorities.
• Security and Integrity: E-invoices cleared by FIRS possess an IRN and CSID (often with a QR code) for authenticity verification. Encryption (e.g., AES-256) and audit trails are required for stored data.
• Audit Accessibility: Taxpayers must provide authorized officials with access to legible e-invoice records during audits. The FIRS system also maintains copies, but businesses are responsible for their own record-keeping.

10. Penalties & Enforcement

Nigeria’s new tax laws impose significant penalties for non-compliance.

• Failure to Issue/Clear Invoices:”Section 104 of the Nigeria Tax Administration Act 2025 prescribes an administrative penalty of ₦200,000, plus an amount equal to 100% of the VAT due on that invoice, plus interest at 2% above the Central Bank’s Monetary Policy Rate (per annum) on the tax due.”
• Invoices not routed through the MBS platform are invalid for tax purposes, disallowing input VAT credit and even corporate tax expense recognition for buyers.
• Technical Integration Failures (Deployment Refusal): Under Section 98 of NTAA 2025, refusing FIRS integration within 30 days incurs a penalty of ₦1,000,000 for the first day and ₦10,000 for each subsequent day.
• Late E-Reporting of B2C Transactions: Failure to report B2C sales within 24 hours can result in a fine of ₦50,000 for each day of delay.
• Other Consequences: Breaches of technical requirements, provider failures (e.g., license revocation), and tax evasion related to e-invoicing can lead to sanctions, fines, or disconnection from the network.

11. Pre-Filled VAT Returns

• Current Status: Nigeria does not yet provide pre-filled VAT returns. Businesses must continue to file monthly VAT returns manually, which FIRS can then cross-verify against the e-invoice data.
• Future Developments: The continuous reporting infrastructure lays the groundwork for potential future pre-filled returns, similar to practices in other countries, but no official timeline has been announced.

12. Impact on SMEs and Startups

The mandate’s design includes considerations for SMEs.

• Phased Inclusion and Thresholds: The staggered rollout (large firms in 2025, medium in 2026, small in 2027) and the VAT turnover threshold (₦50 million) provide relief to smaller businesses.
• Compliance Costs and Administrative Burden: SMEs face new costs for software, IT support, and training, which can be significant. The transition from manual to structured digital invoicing presents a major procedural change.
• Support Measures and Simplifications: FIRS/NRS is conducting stakeholder consultations and training. Plans exist for an accessible e-invoicing portal/interface (web-based or mobile app) for SMEs lacking complex IT systems, potentially offering a free or low-cost solution.
• Market Impact and Readiness: The mandate is accelerating digital transformation. While larger companies may have an initial advantage, there are opportunities for tech startups to provide compliance solutions. SMEs must proactively plan despite later deadlines, as early compliance can lead to benefits like improved record-keeping and reduced errors.

Official References

Key official sources for authoritative information include:

• The NRS E-invoicing Portal (MBS Platform): einvoice.firs.gov.ng
• NITDA Regulatory Guidelines 2025: nitda.gov.ng (Electronic Invoicing Guidelines 2025)
• Nigeria Tax Administration Act 2025 (NTAA 2025) (Sections 23, 98-104)
• Central Bank of Nigeria (CBN) Trade E-invoicing Circular (January 21, 2022)
• Government Press Releases & Public Notices from FIRS/NRS.
• Technical Documentation and Sandboxes available on the NRS E-invoicing developer portal.
• Publications from reputable tax advisory firms like PwC, Deloitte, KPMG, and EY, and specialized VAT tech firms such as VAT IT.

Conclusion

Nigeria’s e-invoicing and e-reporting framework marks a transformative step towards digital tax enforcement. By mandating electronic invoicing for a wide scope of transactions and adopting global best practices like UBL/PEPPOL, the government aims to significantly improve VAT compliance and modernize its tax administration. The phased rollout, extending until 2028, provides varying degrees of preparation time, but “The risks of non-compliance are significant (financial penalties and business interruptions), so affected businesses are strongly advised to prepare in advance…” Timely compliance will not only avoid substantial penalties but can also streamline internal processes, enhance transparency, and prepare businesses for an increasingly digital tax landscape.

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Detailed

1. Scope of the Mandate

• Broad Coverage of Transactions: Nigeria’s e‑Invoicing mandate (FIRS Merchant Buyer Solution – MBS) requires that all VAT‐liable transactions by businesses be documented with electronic invoices (e‑invoices). This covers domestic Business-to-Business (B2B) sales, Business-to-Consumer (B2C) sales, and Business-to-Government (B2G) transactions occurring in Nigeria. In practice, paper or unstructured invoices are being replaced by structured digital invoices for these transactions. The e‑invoices must be generated and transmitted via the government-approved electronic invoicing platform (the FIRS MBS/Electronic Fiscal System) for validation and reporting. [pwc.com], [assets.kpmg.com] [pwc.com]
• Cross-Border Transactions: The mandate’s scope explicitly extends to cross-border transactions involving Nigeria. Any non-resident company selling taxable goods or services to Nigerian customers (and registered for VAT in Nigeria) is in scope. This means foreign entities with Nigerian VAT registration (e.g. providers of digital or imported services) must issue FIRS-compliant e‑invoices for their Nigerian supplies. Exports from Nigeria (which are zero-rated for VAT) also fall under the e‑invoicing system to ensure proper documentation and validation of those outbound supplies. (Note: Because Nigeria is not an EU member, concepts like “intra-EU” acquisitions/supplies do not apply; cross-border transactions are treated under Nigeria’s own rules for imports/exports and supplies by non-resident businesses.) [krestonpedabo.com], [deloitte.com] [krestonpedabo.com]
• Relationship to CBN Trade Invoicing: Separately from the tax-focused FIRS e‑invoicing, Nigeria’s Central Bank (CBN) introduced an e‑Invoicing requirement for all import and export transactions effective 1 February 2022. Under CBN’s rule, all importers and exporters must submit electronic invoices (authenticated by banks) through the Trade Monitoring System for any international trade shipments above USD 10,000 (with certain exemptions). This “e‑valuator/e‑invoicing” system is aimed at curbing under-valuation in trade invoices and operates via a dedicated CBN portal and authorized dealer banks. The tax authority’s MBS platform is a separate system primarily for VAT and tax compliance, although both initiatives reflect Nigeria’s overall push toward electronic documentation of transactions. [cbn.gov.ng] [cbn.gov.ng], [cbn.gov.ng]
• Special Cases (Self-Billing, Triangulation, Special VAT Regimes): As of the latest guidance, no Nigeria-specific deviations or exclusions for self‑billing, triangulation, or sectoral VAT schemes have been announced. The e‑invoicing framework treats invoices, including credit notes and debit notes, as electronic documents subject to the same structured format and reporting rules. Self-billed invoices (where a buyer issues an invoice on behalf of a supplier) are not explicitly addressed in current public documentation; however, it is expected that if self-billing is practiced (with the supplier’s agreement, as per general VAT rules), the resulting invoice must also be generated and reported through the e‑invoicing system to be valid. Similarly, chain or triangulation transactions are not singled out under Nigerian law – any leg of a supply involving a Nigerian VAT-registered supplier or buyer must comply with e‑invoicing obligations if a taxable supply is made. Nigeria’s VAT legislation does not provide EU-style margin schemes or travel agent-specific VAT regimes, so no special e‑invoicing rules for such regimes exist in the current framework. In summary, the mandate is comprehensive: all standard VAT-applicable supplies (whether standard-rated or zero-rated) must be invoiced electronically, while fully VAT-exempt supplies (which are not “taxable supplies” under Nigeria’s VAT law) are generally outside the e‑invoicing requirement. [wtsblackwo…dstone.com] [krestonpedabo.com]

2. Taxable Persons in Scope

• Resident Businesses: **All companies and persons “established” in Nigeria and registered for VAT are in scope for mandatory e‑invoicing. This includes corporate entities, registered business names, and VAT-registered individuals that make taxable supplies. In practice, any Nigeria-based business with a Tax Identification Number (TIN) and required to charge VAT must issue e‑invoices for its sales once the mandate applies to its size category. There is no exemption for particular industries – the requirement spans all sectors (from trading companies to service providers and government contractors) as long as they are VAT-registered and issuing VAT invoices. [deloitte.com], [deloitte.com]
• Non-Resident & Foreign Entities: Non-established companies without a physical presence in Nigeria but who are registered for VAT in Nigeria (e.g. providers of digital services or non-resident suppliers of goods who obtained a Nigerian VAT registration) are also required to comply with Nigeria’s e‑invoicing mandate. The FIRS has clarified that non-resident persons supplying taxable goods or services to Nigeria fall under the e‑invoicing regime, and such businesses should begin assessing their systems for compliance. (The exact effective date for non-resident compliance was pending further announcement as of mid-2025, but these entities are unequivocally within the scope of the mandate.) [deloitte.com]
• Exemptions and Thresholds: Certain small or special taxpayers are either exempt or not immediately required to join the e‑invoicing system:
  • Small Businesses below the VAT threshold: Enterprises with annual turnover below the VAT registration threshold (which was ₦25 million, raised to ₦50 million by the 2025 tax reforms) are not obliged to register for VAT and thus are outside the e‑invoicing requirement. In effect, micro-businesses beneath this turnover do not issue VAT invoices at all and so are not subject to the e‑invoicing mandate until they grow beyond the threshold. (Small firms that are voluntarily VAT-registered must comply once their phase-in date arrives.) [storecove.com], [keepam.ng]
  • Government Entities & Diplomats: Government ministries and agencies (as suppliers) are generally not required to charge VAT and diplomatic missions and international organizations are often VAT-exempt, so these entities are not in the mandatory e‑invoicing system for their transactions. (However, B2G invoices issued to government by vendors are in scope, as those vendors are taxable suppliers.) [storecove.com], [cbn.gov.ng]
  • Certain Imports/Exports: Under the CBN’s parallel e‑invoicing system, individual trade invoices below USD 10,000 are exempt from the CBN’s electronic submission requirement (unless the importer/exporter’s annual trade turnover exceeds USD 500,000). Likewise, exports/imports by specific entities – e.g. Nigeria’s security agencies, diplomatic and consular missions, UN organizations, charitable donations, etc. – do not require CBN e‑invoices. These exemptions are limited to the CBN’s trade documentation rules and do not broadly impact the tax e‑invoicing obligation for normal commercial VAT transactions. [cbn.gov.ng]
• Voluntary Participation and Pilot Program: Before mandates took effect, FIRS carried out a voluntary pilot phase in early 2025 with selected large companies. Other taxpayers not yet mandated could also start preparing and even opt to integrate early. Many businesses used 2025 to voluntarily begin aligning their systems and participating in pilot tests in order to be ready for their mandatory phase. Voluntary onboarding prior to a business’s official deadline is allowed and even encouraged – there are no prohibitions on non-mandated taxpayers issuing e-invoices, provided they follow the standards. [deloitte.com]

3. Implementation Timeline

• Legislative & Regulatory Rollout: Nigeria’s e-invoicing and e-reporting framework has been rolled out in stages through 2022–2026:
  • Feb 2022 (Imports/Exports): The Central Bank of Nigeria (CBN) issued a circular (21 Jan 2022) requiring e‑invoices for all import and export transactions from 1 Feb 2022 onward, inaugurating Nigeria’s first step toward electronic invoicing on the trade front. [cbn.gov.ng]
  • Late 2024 (Pilot and Legal Framework): In November 2024, FIRS (Nigeria’s Federal tax authority) launched a pilot of the domestic e‑invoicing system (Merchant Buyer Solution) with select large companies. Around the same time, the National Information Technology Development Agency (NITDA) issued the “National Regulatory Guideline for Electronic Invoicing in Nigeria 2025,” setting technical standards (effective 1 Sept 2025). The legislative underpinnings were solidified by the passage of the Nigeria Tax Administration Act 2025 (NTAA 2025) in late 2025, which empowers FIRS (now renamed the Nigeria Revenue Service, NRS) to mandate e‑invoicing and imposes penalties for non-compliance. Notably, Sections 23 and 104 of the NTAA require taxable persons to use approved electronic fiscal devices/systems (including e-invoicing) to record & report supplies and allow enforcement of penalties from 1 January 2026. [vatupdate.com], [vatupdate.com] [nitda.gov.ng], [nitda.gov.ng] [krestonpedabo.com], [vi-m.com]
  • Mid-2025 (Go-Live for Large Enterprises): FIRS announced that mandatory e-invoicing for “large taxpayers” (annual turnover ≥ ₦5 billion) would commence 1 August 2025. This was a shorter timeline than many pilot participants expected. Stakeholder engagements were held in March–July 2025 to refine the system and prepare users. Due to industry feedback, the NRS later extended the compliance deadline for large companies to 1 November 2025, effectively creating a brief grace period for final adjustments. From that point, most large businesses began transmitting all their B2B and B2G invoices through the MBS platform, with penalties for non-compliance becoming enforceable from January 2026. [deloitte.com] [pwc.com], [deloitte.com] [einvoice.firs.gov.ng] [krestonpedabo.com]
  • 2026–2028 (Phased Expansion): After large taxpayer rollout, the NRS is implementing a phased schedule for smaller businesses. According to official announcements in early 2026, “medium taxpayers” (annual turnover ₦1 billion to ₦5 billion) will start pilot onboarding in 2026, with mandatory go-live by July 2026 and enforcement from early 2027. “Emerging” and small taxpayers (turnover below ₦1 billion) are slated to begin integrating in 2027, with full compliance enforcement by 2028. This graduated timeline is intended to give smaller firms more time to prepare and to allow the tax authority to incorporate lessons from earlier phases. [punchng.com]
  • Current Status (2026): As of Q1 2026, FIRS (NRS) reports that the large taxpayer phase is substantially underway, with most large companies onboarded and successfully transmitting e-invoices to the MBS platform. The focus in 2026 is on expanding the system to mid-sized companies via continued engagements, sandbox testing, and staged go-lives by mid-2026. The e-invoicing requirement is expected to be universal by 2027–28, after which virtually all VAT-registered businesses in Nigeria – large or small – will be using the electronic invoicing and reporting system. [punchng.com]
• Grace Periods and Pilot Programs: During implementation, FIRS provided some grace periods to allow businesses to adjust. For example, large companies were encouraged to join the pilot in early 2025 and were given until Nov 2025 before strict enforcement began. The NTAA’s penalty provisions on e-invoicing non-compliance took effect 1 Jan 2026, essentially making the latter half of 2025 a soft-landing period for large companies to iron out issues without incurring full penalties. Similar phased approaches (pilot tests followed by enforcement) will be used for medium and small businesses, and officials have indicated that enforcement will only begin after adequate stakeholder engagement, pilot runs, and post-implementation reviews for each group. This indicates a willingness to provide transitional relief and fine-tuning time before penalizing smaller firms. Companies are nevertheless expected to make earnest efforts to be ready by their category’s go-live date, as no long-term exemption from e‑invoicing is planned for any category. [einvoice.firs.gov.ng] [krestonpedabo.com] [punchng.com]

4. Technical & Functional Requirements

• Standardized E-Invoice Format: Nigeria’s e-invoicing framework mandates a structured electronic format for invoices to ensure interoperability and compliance. The Universal Business Language (UBL) schema – specifically the Pan-European PEPPOL BIS 3.0 standard – has been adopted as the basis for e‑invoice data format. In practice, e-invoices will be generated in XML or JSON structure conforming to UBL (with a possible PDF/A-3 + XML embedded option for readability) and must contain all required fields as defined by the standard. The use of international standards (like UBL/PEPPOL) ensures that Nigeria’s e-invoices include globally recognized data elements and can be processed by different systems. [pwc.com], [vatit.com] [vatit.com], [cleartax.com]
• Mandatory Data Fields: E-invoices in Nigeria are rich in content, with sources indicating approximately 55 mandatory data fields spanning key categories like seller identity, buyer details, invoice particulars, line-item details, tax breakdowns, totals, and references. For example, each e-invoice must include at least: [vatit.com]
  • Supplier details: Tax Identification Number (TIN) of the supplier, registered business name, and address. [wtsblackwo…dstone.com]
  • Buyer details: Name and TIN (or other identifier) of the customer; for B2G invoices, the government entity details; for certain B2C cases without TIN, alternative IDs like company registration number can be used as interim identifiers. [einvoice.firs.gov.ng]
  • Invoice information: A unique invoice number, invoice date, and the type of document (e.g. whether it’s a standard invoice, credit note, or debit note). [wtsblackwo…dstone.com], [wtsblackwo…dstone.com]
  • Transaction specifics: Description of goods/services, quantity, unit price, value of each line item, applicable VAT rate(s), VAT amount per line, and total invoice amount with VAT breakdown. [wtsblackwo…dstone.com]
  • Tax details: The VAT amount, indicating standard rate (7.5%) or zero-rate if applicable, and any exemption indicator if part of the supply is exempt. Harmonized System (HSN) codes for goods are also used to classify items consistently. [nitda.gov.ng], [nitda.gov.ng]
  • Unique Identifiers: After submission, the platform will assign an Invoice Reference Number (IRN) and a Cryptographic Stamp Identifier (CSID) (together often called the “digital signature” or “fiscal signature” of the invoice) which must be included on the final e-invoice document, typically also represented as a QR code for easy verification. These ensure each invoice is uniquely identifiable and tamper-evident. [assets.kpmg.com], [wtsblackwo…dstone.com]

All mandatory fields must be correctly populated to pass the platform’s validation – if even one required field is missing or incorrect, the invoice will be rejected by the system and must be corrected before it can be treated as a valid tax invoice.

• E-Reporting Data & Format: In Nigeria’s model, “e-reporting” refers primarily to the electronic submission of transactional data that have not undergone real-time clearance – notably high-volume B2C (retail) transactions. Invoices/receipts issued to consumers do not need prior tax authority approval before issuance but must be reported to the tax portal within a short timeframe (currently within 24 hours of sale) for fiscal reporting purposes. These B2C invoice reports still require key data about the sale (seller’s TIN, invoice number/date, taxable amount, tax amount, etc.), but in a more streamlined “fiscal report” format. Each B2C receipt must also include a QR code so that customers or auditors can verify its authenticity against the government system after it’s reported. The FIRS’s MBS platform supports APIs and batch uploads for submitting these reports electronically. The goal is to capture retail transaction data in near-real-time without unduly disrupting point-of-sale operations. No separate monthly summary is required for those transactions, as the daily/real-time submissions feed into the tax authority’s database continuously; however, the system rules currently stipulate that all e-invoices (whether pre-cleared or post-reported) must be lodged in the central system no later than 21 days from their issuance date as an outer limit. [krestonpedabo.com] [vi-m.com] [wtsblackwo…dstone.com]
• System Architecture and Integration: Technically, Nigeria’s system blends a centralized clearance model with a federated network of service providers: e-invoices are transmitted to the central FIRS/NRS platform (the clearing portal) but typically via **accredited third-party Access Point Providers (APPs) and System Integrators (SIs) or via direct API integration. Businesses have two main options: (1) integrate their own ERP/accounting systems directly with the FIRS e-invoicing API (becoming “self-integrating taxpayers”), or (2) route invoices through an approved intermediary service (APP) that interfaces with FIRS. In both cases, the data flows into the central clearance platform for validation. Nigeria’s model is inspired by the PEPPOL 4-corner network used internationally – once a business connects through an Access Point or direct integration, its e-invoices can reach any trading partner (and the tax authority) through the network. [assets.kpmg.com] [pwc.com]
• Transmission & Validation Workflow: For B2B and B2G invoices, Nigeria uses a “clearance” model: the supplier’s system (or their APP) must transmit the e-invoice data to the FIRS/NRS MBS platform before or at the time of invoice issuance to the buyer. The platform validates that the invoice is in the correct format and contains all required fields; if valid, it performs fiscal checks and then assigns an official Invoice Reference Number (IRN) and a digital signature (CSID), returning the cleared invoice (often with a QR code) to the supplier. Only then can the finalized invoice be delivered to the customer. This process typically occurs in real-time or near real-time – the FIRS has indicated that approvals should be returned within a couple of hours at most for B2B invoices under normal conditions. For B2C invoices, the process is “post-audit”: the business can issue the receipt immediately to the consumer (often including a QR code for later verification), but then must send the invoice data electronically to the FIRS system within 24 hours for the sale to be officially recorded. B2C data can be transmitted in batches or via a simplified interface (e.g. a point-of-sale system linked to the FIRS API). There is also a mobile app (“MBS 360”) that allows customers or businesses to scan the QR code on a receipt to verify that it was properly reported and stored in the tax system. [assets.kpmg.com] [assets.kpmg.com], [wtsblackwo…dstone.com] [vatit.com] [krestonpedabo.com], [vi-m.com] [vi-m.com]
• Accredited Service Providers: To facilitate this ecosystem, Nigeria requires service providers to be accredited. The NITDA’s 2024/2025 guidelines lay out criteria for accrediting Access Point Providers (gateway companies that transmit invoices) and System Integrators. These providers must meet technical standards, comply with security protocols, and often hold relevant certifications (e.g. ISO 27001 for data security). A list of licensed APPs/SIs is provided by FIRS/NITDA. Taxpayers may choose a provider or even seek their own accreditation to serve as an APP/SI if they meet the requirements. The system uses RESTful API interfaces with OAuth 2.0 authentication for secure data exchange between taxpayer systems and the FIRS platform. All transmitted invoice data must be encrypted (e.g. using TLS 1.3 in transit and AES-256 at rest) to protect confidentiality. [nitda.gov.ng], [nitda.gov.ng] [vatit.com] [assets.kpmg.com] [nitda.gov.ng], [vatit.com]
• Digital Signatures & Integrity: Strong digital integrity controls are mandatory. Invoices must be digitally signed and tamper-proof. The FIRS system affixes a cryptographic digital signature (Cryptographic Stamp Identifier) on each cleared invoice, and XML invoices are expected to comply with XAdES digital signature standards (for XML) while PDF invoices (if used) should comply with PAdES standards. The system leverages the Elliptic Curve Digital Signature Algorithm (ECDSA) for signing invoices and generating the CSID codes. These measures guarantee that once an invoice is approved, its contents (amounts, parties, date, etc.) cannot be altered without detection, thereby ensuring the authenticity and integrity of e‑invoice data. Businesses must also implement internal controls to protect their private keys and follow the required procedures for any certificate issuance or renewal through the e-invoicing portal. [assets.kpmg.com] [nitda.gov.ng]
• Processing and Performance: The system is designed for high uptime and quick processing. Official guidelines for APPs/SIs indicate that invoices should be processed and transmitted within one business day at most (in practice, B2B invoices are often cleared within hours). The MBS platform operates continuously (24/7) to allow real-time or near-real-time invoice clearance and reporting, supporting continuous business operations. In case of connectivity outages, taxpayers are expected to issue invoices and then upload/submit as soon as possible; the FIRS has planned for some offline capabilities to buffer and sync invoices when internet is restored. [nitda.gov.ng] [assets.kpmg.com]

5. Correction of Errors in E-Invoices and E-Reporting

• E-Invoice Corrections: Under the clearance system, an e-invoice that fails validation (due to missing fields or format errors) must be corrected and re-submitted before it can be cleared and considered a valid tax invoice. The FIRS MBS platform provides for rejection notifications and error codes when an invoice is not accepted, enabling taxpayers (or their System Integrator) to fix issues and resend the invoice data. Once an e-invoice is cleared and issued an IRN/CSID, its details (including amount, VAT, buyer info, etc.) are locked in and cannot be altered. If a mistake is discovered on a cleared invoice, the supplier must issue a corrective document: typically an electronic credit note or debit note (also structured in the standard format) that references the original invoice to adjust or cancel it. These adjustment notes themselves need to be submitted through the e‑invoicing platform just like a regular invoice so that the tax authority is notified of the change. The credit note will carry its own IRN and will be matched against the original invoice in the system. [wtsblackwo…dstone.com]

In practice, the procedure for correcting an already-issued invoice is to generate a credit note (negative invoice) or revised invoice, with references to the original invoice number and date. The credit note must include all required fields (original invoice reference, reason for amendment, corrected amounts or VAT) and once submitted and cleared by FIRS, it will offset or amend the original invoice data in the tax system. This mirrors existing VAT rules (which have always required issuance of credit/debit notes for changes or cancellations of invoices). The e-invoicing system ensures such corrections are captured in real-time, maintaining an audit trail of all adjustments.

• E-Reporting Corrections: For electronically reported (post-audit) transactions (e.g. B2C sales data sent after invoice issuance), corrections are similarly handled by submitting a corrected report or adjustment document. If an error is found in a B2C invoice that was already issued to a customer, the business may need to issue a corrected receipt or credit note to the customer and then transmit that correction through the e-invoicing portal. The NRS has indicated that taxpayers should notify the tax authority of any inaccuracies in reported data and make amendments as needed (for instance, by including the corrected figures in a subsequent report or via a specific adjustment submission). The exact mechanism for B2C/reporting corrections is expected to be clarified in detailed FIRS user guidelines. In general, however, the principle is that any invoice or transactional data sent to the authorities in error should be promptly rectified by sending a corresponding correcting entry (credit note or amended report) through the system. Taxpayers should also maintain documentation explaining the reason for corrections in case of future audits. Timelines for corrections will likely follow general provisions of the tax law (for example, making corrections in the next monthly VAT return, or within a specified period of discovering the error), to ensure the tax authority is aware of the change. The e‑invoicing framework’s continuous reporting nature means errors can and should be fixed as soon as possible by electronic notification to FIRS.

6. Transmission & Workflow

• Invoice Submission to Tax Authority: Nigeria’s e-invoicing system is based on a central clearance model. All e‑invoices (for B2B and B2G) are transmitted to a centralized platform operated by the tax authority (NRS/FIRS) for clearance before issuance to the customer. In practice, companies will either connect their own systems via the FIRS’s API or use an intermediary Access Point Provider to send the invoice data to the MBS platform. The invoice is in a standard digital format (UBL XML/JSON) and is sent through secure channels (e.g. API over TLS 1.3) for validation. Once the invoice passes all checks, the platform generates an IRN, applies a digital signature (CSID), and returns the cleared e‑invoice, which the supplier can then deliver to the buyer. The workflow follows the “four-corner” model (borrowed from PEPPOL): the supplier’s system (Corner 1) sends the e-invoice via its Access Point (Corner 2) to the FIRS platform (Corner 3, acting as a clearance authority), which then forwards the validated e-invoice to the buyer’s Access Point (Corner 4) for retrieval by the buyer’s system. This ensures the tax authority receives the data in real time, while trading partners receive authentic, certified invoices. Small businesses without complex IT can use the official FIRS e-invoicing web portal or simple apps to issue and transmit invoices, whereas larger companies will likely integrate their ERPs with service providers or APIs for automated submission. [assets.kpmg.com], [wtsblackwo…dstone.com] [assets.kpmg.com] [pwc.com], [assets.kpmg.com]
• Deadlines and Frequency: The Nigerian system imposes strict timing requirements for sending invoice data:
  • B2B/B2G invoices must be cleared in real-time (or near-real-time). In effect, an invoice to a business or government should be submitted to the FIRS platform before or at the moment of issuing it to the customer. Any delay in obtaining approval means the invoice is not legally valid for VAT purposes (customers may not be able to claim input tax on an unvalidated invoice). The MBS platform is designed for high-speed processing to support this need for real-time clearance. [assets.kpmg.com]
  • B2C invoices/receipts (for sales to consumers) do not require prior clearance, but must be reported electronically within 24 hours of issuance. This “T+1” reporting deadline means, for example, an aggregate of the day’s retail transactions or each transaction detail must be transmitted by the next day so that the tax authority’s records stay up to date. In practice, many businesses will likely automate this by end-of-day batch uploads or continuous syncing from point-of-sale software. [krestonpedabo.com]
  • Periodic summaries: Because each invoice is individually captured, businesses are not required to submit separate monthly invoice listings to the tax authority – the e-invoice system serves that function. However, normal monthly VAT returns are still filed by the 21st of the following month as per VAT law, and these returns should reconcile with the e-invoice data already in the system. (The eventual goal is to use e-invoice data to cross-check or even pre-fill VAT return figures – see section 11.) [keepam.ng]
  • Grace for exceptional cases: The FIRS recognizes that on rare occasions (e.g. system downtime or network issues) immediate transmission may not be possible. The regulations therefore allow a maximum window (e.g. within 21 days of the invoice date) for all invoices to be reported into the system. In other words, if an invoice could not be sent in real time due to technical difficulties, it should still be uploaded as soon as feasible and no later than the 21-day mark. This ensures completeness of reporting. Regular failures to meet the real-time or next-day requirements, however, could trigger penalties (such as daily fines for late B2C reporting – see section 10). [wtsblackwo…dstone.com]

7. Self-Billing

• Permissibility and Process: Self-billing – where the buyer prepares the invoice on behalf of the supplier (with prior agreement) – is not explicitly detailed in public e-invoicing releases so far. However, there is no indication that self-billing is prohibited under Nigeria’s VAT laws or the e-invoicing framework. It is expected that self-billed invoices, if used, must also be generated and reported through the e-invoicing system to be considered valid (just as standard supplier-issued invoices are). The self-billing arrangement would need to comply with existing VAT regulations (e.g. the buyer and supplier must have a written agreement for self-billing).
• Use of the E-Invoicing Platform: In practice, a buying company that self-bills would likely need to have access to the FIRS e-invoicing platform (as the “issuer” of the invoice) and submit the invoice data for clearance just as a supplier would. The cleared e-invoice (with IRN and digital signature) would then be provided to the supplier and retained by the buyer. Further guidance from FIRS may clarify the exact mechanics for self-billing under the new system. Until then, businesses engaged in self-billing should plan to treat those invoices like any other invoice – meeting the same data requirements and clearance/reporting obligations via the MBS platform.
• Buyer Approval & Content Rules: Since self-billing shifts the invoice preparation to the buyer, the buyer’s system must be capable of producing a compliant e-invoice and obtaining FIRS validation. The content of a self-billed invoice would include the usual mandatory fields (including both parties’ details and VAT numbers, transaction particulars, etc.), and it should clearly indicate that it is a self-issued tax invoice on behalf of the supplier. The standard e-invoice format (UBL schema) supports identifying the document as a “Self Billed Invoice” in the invoice type field, and this should be used where applicable. Both parties remain responsible for ensuring the invoice’s accuracy. Once cleared, the self-billed e-invoice’s details are in the FIRS system, satisfying the reporting requirement. Buyers may also need to provide suppliers with copies of these self-billed e-invoices for their records. There is no separate approval step by the supplier via the platform (beyond the prior agreement to self-bill), but the supplier will see the invoice data in the system and can raise any disputes or corrections if needed (likely through issuing a credit note via the platform).
• Notifications or Approvals: There is currently no special notification to FIRS required prior to using self-billing, apart from the standard requirement of both parties’ consent. The e-invoicing system is designed to handle various invoice types (including credit notes and self-billed invoices) as long as they are submitted in the correct format. Companies should ensure they have agreements in place with their customers/suppliers for self-billing and stay tuned for any additional FIRS guidance on how to reflect such arrangements in the MBS system.

8. Triangulation & Special Scenarios

• Triangulation and Chain Transactions: The e-invoicing rules to date do not specifically call out “triangulation” or chain transactions as a distinct category. In Nigeria, any multi-party or chain transaction that involves a taxable supply by a Nigeria-registered entity would simply be treated as a standard supply for e-invoicing purposes. This means each leg of the transaction that constitutes a taxable supply under Nigerian VAT law would require an e-invoice. For instance, if goods are sold by a Nigerian company to an intermediary who then sells to a Nigerian buyer, both the first sale (Nigerian seller to intermediary) and second sale (intermediary to end buyer) should be covered by e-invoices, assuming the suppliers are registered for VAT. There is no special simplification for domestic chain transactions – the normal rules apply. International “triangulation” (as understood in EU VAT law) is not directly applicable in Nigeria’s jurisdiction, so no specific provisions exist for that scenario.
• Cross-Border Reverse Charge Scenarios: In cases where Nigerian businesses import services or goods from foreign suppliers that are not VAT-registered in Nigeria (and thus cannot issue a Nigerian VAT invoice), the Nigerian business typically self-accounts for VAT via the reverse charge mechanism. The e-invoicing framework has not introduced a separate “self-invoicing” or reporting requirement for imports of services; such transactions continue to be handled via the reverse charge entries on the VAT return as per existing VAT law. However, if the foreign supplier is VAT-registered in Nigeria (for example, a foreign e-service provider registered under Nigeria’s Significant Economic Presence rules), then that supplier would issue a Nigerian e-invoice for the service provided, just like any local supplier. Essentially, the e-invoicing system covers any taxable supply that is documented by a VAT invoice – if no VAT invoice is issued (as in a pure reverse-charge importation), the current guidance does not mandate generating a pseudo-invoice for the FIRS system. This may evolve as the tax authority moves towards fuller “continuous transaction control” of all sales and purchase data, but as of the latest rules the focus is on sales invoices issued by suppliers. [deloitte.com]
• Zero-Rated & Exempt Supplies: Zero-rated supplies (e.g. exports) are considered taxable supplies (at 0% VAT) and thus must be issued as e-invoices and reported, just like standard-rated sales. This allows FIRS to track such transactions (which is important for VAT refund/credit verification on exports). Exempt supplies (e.g. basic food items, medical services, etc., which are not subject to VAT at all) do not create a VAT invoice obligation under Nigerian law – the e-invoicing mandate accordingly does not force companies to generate “invoices” for genuinely exempt sales that would not normally require a tax invoice. In practice, many businesses still issue commercial invoices or receipts for exempt sales, but those documents would not be processed by the VAT e-invoicing platform unless FIRS provides a mechanism to record them for information purposes. The core aim of the e-invoicing system is to capture VAT-taxable transactions; purely exempt supplies are outside its scope. [krestonpedabo.com]
• Special VAT Schemes: Nigeria’s VAT system does not have special margins schemes (e.g. for second-hand goods) or a travel agent margin scheme like the EU. No special e-invoice rules have been defined for any such regimes. Should any special VAT treatments apply (e.g. VAT withholding on certain contracts, or specific sectors with unique VAT rules), those are generally handled outside the invoice content – the e-invoice would still be issued normally, with perhaps an annotation if required. The focus remains on ensuring that each taxable transaction, regardless of industry, is recorded and transmitted to the tax authorities in real time for oversight.

9. Archiving & Retention

• Electronic Archiving Requirements: All e‑invoices and related records must be safely stored and accessible for the legally required retention period. Under Nigeria’s data regulations and tax practices, businesses typically must retain tax invoices and records for several years (up to 5–6 years or more) for audit purposes. In fact, some guidance suggests maintaining electronic invoices for at least 10 years, especially for import/export documentation. The FIRS e‑invoicing system and accredited providers are required to support data retention and retrieval features. The NITDA guidelines mandate that all e‑invoice data and logs be securely archived on servers located within Nigeria (i.e. data must be stored locally and not exclusively in foreign jurisdictions, to ensure Nigerian authorities have access). E‑invoices and their associated metadata (timestamps, digital signatures, delivery logs, etc.) should remain electronically stored in their original format and be readable for the full retention period, with measures to guarantee their integrity, authenticity, and accessibility over time. [storecove.com] [nitda.gov.ng]
• Security and Integrity of Stored Invoices: The regulations put strong emphasis on ensuring the integrity and authenticity of archived e‑invoices. E‑invoices cleared by FIRS come with a digital signature (the CSID and IRN) and often a QR code, which together allow any copy of the invoice to be verified for authenticity. Businesses and APPs must use encryption and security best practices (e.g. encryption standards like AES-256 for stored data) to protect invoice archives from tampering or unauthorized access. Auditability is also key: audit trails (logs of access and alterations) should be maintained so that any changes or access to the invoice data is recorded. [wtsblackwo…dstone.com] [nitda.gov.ng], [vatit.com] [vatit.com]
• Retention Period & Location: The Nigeria Tax Administration Act 2025 does not explicitly set a new uniform retention period for VAT invoices, so the existing record-keeping rules (5 to 6 years under various tax laws) are presumed to still apply. However, companies engaged in cross-border transactions may choose to retain e-invoice data for up to 10 years to mirror best practices in international trade and ensure availability for customs audits or transfer pricing documentation. The FIRS/NITDA e-invoicing policies require that archives be kept on servers in Nigeria (either on the taxpayer’s own systems or with a local service provider) for compliance with data localization laws. Additionally, businesses are advised to ensure that e-invoices can be reproduced in a human-readable format on demand, since tax auditors or customers might request printed or PDF copies of invoices. This is typically achieved by storing invoices either as PDF/A-3 files with embedded XML or by using tools that can render the XML/JSON data into a readable invoice format. [storecove.com] [nitda.gov.ng] [pwc.com]
• Audit Accessibility: During audits or inspections, taxpayers must be able to provide authorized officials access to their e‑invoice records in a legible format. The FIRS’s system itself keeps a copy of all submitted invoices, but businesses are still responsible for their own record-keeping. The NITDA guideline specifies that the national e-invoicing platform and providers must have facilities for data retrieval and transfer to ensure business continuity and audit support. In short, both the tax authority and the taxpayer should have access to the archived e-invoices. Failure to maintain or provide archival records as required could be considered non-compliance and subject the business to penalties (see section 10). [nitda.gov.ng]

10. Penalties & Enforcement
    Nigeria’s new tax laws tie significant penalties to non-compliance with e‑invoicing and e‑reporting requirements, underlining the importance of the mandate. Key sanctions include:

• Failing to Issue/Clear Invoices through the System: If a taxpayer fails to process a taxable supply through the e‑invoicing (fiscalization) system, Section 104 of the Nigeria Tax Administration Act 2025 prescribes an administrative penalty of ₦200,000, plus an amount equal to 100% of the VAT due on that invoice, plus interest at 2% above the Central Bank’s Monetary Policy Rate (per annum) on the tax due. In effect, not using the e-invoice platform to issue a required invoice can result in a fine equal to the tax amount not properly reported, doubled (100% surcharge), on top of a flat ₦200k fine and accruing interest. This applies to scenarios such as bypassing the system (issuing paper invoices without reporting) or refusing to issue e-invoices at all. Moreover, **invoices that are not routed through the MBS platform will be deemed invalid for tax purposes – meaning the buyer cannot claim input VAT credit on them – effectively penalizing non-compliance by disallowing tax deductions and even corporate tax expense recognition for unreported transactions. [pwc.com] [assets.kpmg.com]
• Technical Integration Failures (Deployment Refusal): Nigeria’s law recognizes the need for FIRS to deploy technology for tax enforcement. Under Section 98 of the NTAA 2025, if a company does not permit the tax authority to integrate or install its digital tax system within 30 days of notice, the company faces a penalty of ₦1,000,000 for the first day of default and ₦10,000 for each subsequent day of continued failure. In practice, this means that once FIRS/NRS notifies a taxpayer (for example, to integrate their sales system or grant API access), any delay beyond 30 days triggers daily fines. This rule was designed to prevent businesses from stalling or obstructing the implementation of the e-invoicing (and other digital tax) systems.
• Late E-Reporting of B2C Transactions: The regulations impose a specific penalty for delayed reporting of B2C invoices. If a business does not report its B2C (consumer) sales within the stipulated 24-hour window, it can incur a fine of ₦50,000 for each day of delay. This daily penalty for late reporting is meant to ensure that even non-cleared retail transactions are promptly transmitted to the tax authorities. Companies with high-frequency B2C sales (like retailers and telecom providers) will need to automate their e-reporting to avoid such fines. Notably, as of 2026, nearly all large taxpayers in Nigeria have begun successful daily reporting of B2C transactions to FIRS, indicating the feasibility of compliance within the 24-hour timeframe. [vatit.com] [punchng.com]
• Other Non-Compliance Consequences: The NITDA e-invoicing guidelines note that any breach of the technical requirements or provider obligations can lead to sanctions such as fines or disconnection from the e-invoicing network. For example, if an accredited Access Point Provider fails to meet standards, NITDA can revoke its license or disconnect it, which would force its client taxpayers to switch to another provider. Businesses are therefore advised to work with reputable, compliant providers. Additionally, the FIRS may impose general fines or take enforcement action for any form of misrepresentation, fraud, or evasion related to invoice reporting. Since e-invoicing is now compulsory, failure to issue an invoice at all (to avoid tax) is equivalent to failing to remit VAT, subject to existing penalties under VAT law and possibly criminal prosecution in cases of tax evasion. [nitda.gov.ng]

11. Pre-Filled VAT Returns

• Current Status – No Pre-filled Returns Yet: As of the latest information (2025–2026), Nigeria does not yet provide pre-filled VAT returns to taxpayers. Even with the advent of real-time invoice data collection, VAT-registered businesses must continue to file monthly VAT returns (Form 002) manually by the 21st day of the month following the reporting period, declaring their output tax, input tax, and net VAT payable. The introduction of e-invoicing will, however, greatly enhance the tax authority’s ability to cross-verify these self-filed returns. FIRS can compare the sales and purchase data gathered via the e-invoice system with the figures reported in the monthly VAT returns, flagging any discrepancies for audit or follow-up. [keepam.ng]
• Planned or Future Developments: While pre-populated VAT returns are not yet a feature of the Nigerian system, the infrastructure being put in place (continuous reporting of transactions) lays the groundwork for potential future innovations. Tax authorities could eventually leverage the comprehensive transaction data to pre-fill portions of VAT returns (such as total output VAT based on e-invoices, or proposed input VAT amounts to claim, etc.), similar to practices in some other countries. There have been discussions at stakeholder forums about using e-invoice data for automated compliance checks and even for generating draft returns, but no official timeline or plan for pre-filled VAT returns has been announced by FIRS. For now, taxpayers should treat the e-invoicing system as a complement to, not a replacement for, the standard VAT return filing process – ensuring that their monthly returns align with the data transmitted through MBS. Any future move to pre-filled returns would be communicated by the authorities via new regulations or public notices.

12. Impact on SMEs and Startups

• Phased Inclusion and Thresholds: The e-invoicing mandate’s design takes into account the capacities of Small and Medium Enterprises (SMEs). The gradual rollout schedule (large firms in 2025, medium in 2026, small in 2027) is explicitly intended to give smaller companies additional time to prepare. Furthermore, the VAT Act’s threshold (recently raised to ₦50 million turnover) means the very smallest businesses are not even required to register for VAT, sparing micro-enterprises from compliance until they scale up. This phased approach and threshold exemption act as de facto relief measures for the smallest startups, ensuring that companies have the necessary time and size before facing mandatory e-invoicing. [punchng.com] [storecove.com], [keepam.ng]
• Compliance Costs and Administrative Burden: For SMEs, the mandate introduces new costs and operational requirements. These include upgrading or acquiring compatible billing software or ERPs, possibly hiring IT/system integration support, and training staff on the new processes. There may also be fees for using certified Access Point Providers or obtaining digital certificates. Such costs can be significant for small businesses, potentially impacting their cash flow and profitability. Complexity is another concern – many small businesses in Nigeria currently use manual or informal invoicing methods, so adopting a structured digital system represents a major procedural change. There is a risk of increased short-term administrative burden as SMEs adapt to the new system, and companies have voiced concerns about potential downtime or technical issues disrupting sales. These factors mean some SMEs may initially struggle with compliance, and indeed a 2025 survey found that a large percentage of small businesses were unaware of the mandate’s details, indicating a need for greater outreach and training efforts. [assets.kpmg.com] [vi-m.com] [vatit.com]
• Support Measures and Simplifications: Recognizing these challenges, the government and relevant agencies have taken steps to support SMEs. FIRS/NRS has engaged in extensive stakeholder consultations and training workshops to raise awareness and prepare businesses, including smaller enterprises, for the change. NITDA’s guidelines encourage the development of “MVP” e-invoicing solutions and lightweight applications suitable for SMEs, and FIRS has indicated plans to provide an accessible e-invoicing portal/interface for small businesses that do not have complex IT systems. This could be a free or low-cost solution (e.g., a web-based portal or simple mobile app) allowing SMEs to log in and issue e-invoices without needing expensive ERP integrations. Additionally, the phased timeline itself is a form of relief – SMEs get until 2027 to comply, and even then enforcement would likely be preceded by pilot phases and support. [vatit.com] [assets.kpmg.com] [punchng.com], [punchng.com]

As for regulatory simplifications, there is no indication of a separate “simplified” invoicing regime for SMEs beyond the core system. All invoices must contain the full data set and be transmitted to FIRS. However, businesses below the VAT threshold remain outside the system entirely, which is a major concession to micro-enterprises. Policymakers have suggested that the e-invoicing data could actually help SMEs with compliance in the long run (for example, by simplifying VAT filings or providing easier access to loans given the availability of verifiable sales data). On a macro level, the government has noted that digitalization of invoicing may bring long-term efficiency gains – such as reducing manual paperwork, minimizing VAT errors, speeding up payment cycles, and improving financial transparency – which can benefit growing businesses as they integrate these technologies. Over time, early adopters among SMEs might gain a competitive edge through more streamlined processes and better compliance records, while those slow to adapt could face challenges (including potential penalties or difficulties in dealing with larger companies and government clients that require e-invoices). [vi-m.com], [vi-m.com]

• Market Impact and Readiness: The e-invoicing mandate is accelerating digital transformation in Nigeria’s business environment, which could level the playing field but also raise the bar for market entry. In the short term, larger companies may have an advantage as they have more resources to implement the required systems; smaller firms might experience cash-flow strain due to new compliance costs (software acquisition, internet connectivity upgrades, etc.). However, there are also opportunities for tech startups and service providers to support the transition (e.g., 16 local tech companies were recently engaged by NRS as partners to help onboard taxpayers) – indicating new markets for innovative invoicing and financial software solutions. Government and industry groups have been assessing SME readiness: as noted, many small businesses were initially unaware of the mandate, prompting increased outreach. The consensus in expert newsletters is that SMEs should proactively prepare despite the later deadline, as early compliance can yield benefits like improved record-keeping, reduced errors, and avoidance of last-minute rush or penalties. There is also discussion about potential incentives – for instance, tax advisors have suggested offering tax credits or deductions for companies that invest in e-invoicing technology early to offset the initial costs for SMEs, though no formal incentive program has been announced by the government yet. [assets.kpmg.com] [einvoice.firs.gov.ng] [krestonpedabo.com], [vi-m.com]

13. Official References
    Businesses and observers can refer to a number of official sources for authoritative information and guidance on Nigeria’s e‑invoicing and e‑reporting framework:

• FIRS/NRS E-Invoicing Portal (MBS Platform): The Nigeria Revenue Service has an official e-invoicing portal (NRS MBS) for taxpayer onboarding and technical documentation. The portal provides integration guides, technical specifications, and FAQs for the e‑invoicing system. (Link: einvoice.firs.gov.ng ) [vatupdate.com]
• NITDA Regulatory Guidelines 2025: The National Information Technology Development Agency (NITDA) published the “National Regulatory Guideline for Electronic Invoicing in Nigeria 2025,” which outlines the standards, data schema (UBL format), security requirements (digital signatures, encryption), and obligations for service providers in the e‑invoicing ecosystem. This document is available on NITDA’s official website for reference. (Link: nitda.gov.ng – see Electronic Invoicing Guidelines 2025)* [nitda.gov.ng], [nitda.gov.ng]
• Tax Legislation – Finance Acts and NTAA 2025: The statutory basis for e-invoicing is found in recent legislation. The Federal Inland Revenue Service (Establishment) Act 2007 (as amended) gave FIRS authority to automate tax administration (Sections 25–26). More directly, the Nigeria Tax Administration Act 2025 (also referred to as the Tax Administration (Reform) Act) includes provisions mandating the use of electronic fiscal devices/e-invoicing (e.g. Section 23) and specifying penalties (Section 98–104) for non-compliance. These Acts and related Finance Acts can be accessed via official gazettes or the Federal Ministry of Finance’s publications. [pwc.com] [assets.kpmg.com]
• Central Bank of Nigeria (CBN) Trade E-invoicing Circular: The CBN’s “Guidelines on the Introduction of e-Valuator and e-Invoicing for Import and Export in Nigeria” (issued 21 Jan 2022) is an official publication detailing e-invoice requirements for international trade transactions, including registration on the CBN’s Trade Monitoring System (TRMS) and the global price verification mechanism. It is available on the CBN’s website and through financial regulatory advisories. (Link: cbn.gov.ng/Out/2022/ted…pdf – CBN Trade & Exchange Dept Circular)* [cbn.gov.ng], [cbn.gov.ng]
• Government Press Releases & Public Notices: The tax authority has released public notices and press releases regarding e-invoicing. For example, the FIRS Public Notice of 9 July 2025 formally announced the 1 August 2025 mandate for large taxpayers, and subsequent NRS updates (e.g. February 2026 NRS notice) outlined the extended rollout timetable for medium and small taxpayers. These can often be found on the official FIRS/NRS website or in national news outlets. (See e.g. FIRS press release on deadline extension to 1 Nov 2025). [deloitte.com] [punchng.com] [einvoice.firs.gov.ng]
• Technical Documentation and Sandboxes: The NRS E-invoicing developer portal provides detailed API documentation, schema definitions, and a test environment (“simulation portal”) for taxpayers or software developers to build compliant solutions. Accredited software providers also offer documentation – some have published integration guides and support materials (e.g., Pagero’s integration documents referenced by FIRS). Companies should ensure any software used aligns with these specifications. [einvoice.firs.gov.ng], [einvoice.firs.gov.ng] [vatupdate.com]
• Tax Advisory Publications and Guides: Several reputable tax and legal advisory firms have published detailed analyses and updates on Nigeria’s e-invoicing regime. These include:
  • PricewaterhouseCoopers (PwC) Nigeria’s alert “Key facts about proposed e-invoicing in Nigeria” (2024), which covers the rationale, legal basis, and preparatory steps for businesses. [pwc.com], [pwc.com]
  • Deloitte Nigeria’s perspective “FIRS announces e-invoicing mandate for large taxpayers” (July 2025), summarizing the requirements for large companies and non-residents. [deloitte.com], [deloitte.com]
  • KPMG’s publication “Electronic Fiscal System in Nigeria: A Game Changer” (June 2025), analyzing the e-invoicing model (clearance vs. reporting), legal framework, and potential challenges. [assets.kpmg.com], [assets.kpmg.com]
  • Ernst & Young (EY) Global Tax News update “FIRS rolls out e-Invoicing platform” (May 2025), providing an overview of the system and its expected impact.
  • VAT IT’s Nigeria E-invoicing Guide (Nov 2025), which offers a business-friendly summary of scope, technical standards (like UBL format and mandatory fields), and compliance tips. [vatit.com], [vatit.com]
  • Various Nigerian law firms (e.g. Stren & Blan Partners, WTS Blackwoodstone, Omaplex Law) and tax tech firms (ClearTax, Storecove, etc.) have also issued insight articles and practical guides in 2025 explaining the mandate’s requirements and offering compliance advice. These newsletters can be useful supplementary references, though official publications should always be consulted for the most authoritative requirements. [storecove.com], [wtsblackwo…dstone.com]

14. Summary
    Nigeria’s e-invoicing and e-reporting framework represents a major shift in tax administration, moving the country toward a real-time, digital compliance model. In scope are essentially all VAT-related transactions by VAT-registered businesses – including B2B, B2G, domestic consumer sales above set thresholds, and cross-border supplies involving Nigeria – which must be invoiced and/or reported through the FIRS/NRS electronic invoicing system. The mandate is being phased in from 2025 to 2028: large companies began e-invoicing in 2025, medium businesses in 2026, and smaller enterprises by 2027, with full enforcement slated by 2028. The legal foundation was laid in 2025 via new tax legislation empowering the use of Electronic Fiscal Devices and imposing penalties from Jan 2026. Under the system, B2B/B2G invoices require clearance (approval and a cryptographic IRN) from the tax authority before being finalized, while B2C transactions must be reported within 24 hours. [pwc.com], [krestonpedabo.com] [punchng.com] [krestonpedabo.com], [vi-m.com] [assets.kpmg.com] [krestonpedabo.com]

Key obligations for taxpayers include adhering to the standardized e-invoice format (UBL XML), including all mandatory data fields (around 55+ fields), using digital signatures/IRN, and timely transmission of invoices via accredited channels. Non-compliance can lead to substantial penalties – for example, failing to use the e-invoicing system for a taxable sale can trigger a ₦200k fine plus 100% of the VAT due, plus interest, and late consumer sales reporting incurs ₦50k per day. Additional consequences include disallowance of input VAT claims on invoices not issued through the system and potential daily fines (₦1m + ₦10k) for impeding the technology rollout. [vatit.com] [pwc.com] [assets.kpmg.com]

From a business perspective, the e-invoicing mandate carries both risks and opportunities. Compliance will require upfront investments in software or services, staff training, and process changes – potentially burdensome for SMEs – but in return should yield long-term benefits like faster invoice processing, reduced errors, improved record-keeping, and more efficient VAT refund cycles. Early adopters may gain better transparency and smoother audits, whereas those who delay face operational disruption or penalties once enforcement kicks in. The risks of non-compliance are significant (financial penalties and business interruptions), so affected businesses are strongly advised to prepare in advance by upgrading their systems and engaging with FIRS or accredited providers for integration support. [assets.kpmg.com] [krestonpedabo.com], [vi-m.com]

SMEs and startups should note that while they have later deadlines and some initial exemptions (e.g. very small businesses below the VAT threshold are not immediately impacted), the direction is clear: eventually all VAT-eligible businesses must comply. Government agencies have indicated plans to assist smaller firms with outreach and possibly simplified e-invoicing tools. Nonetheless, it is crucial for such businesses to start planning early – assessing their needs for compliant software, internet connectivity, and training – to avoid a last-minute scramble. [storecove.com] [assets.kpmg.com]

In conclusion, Nigeria’s e-invoicing and e-reporting framework marks a transformative step toward digital tax enforcement. By mandating electronic invoicing on a wide scope of transactions, the government seeks to increase VAT compliance, close revenue leakages, and modernize tax administration. The policy is underpinned by robust legislation and technical standards aligning with global best practices (like PEPPOL’s UBL format and security protocols), and it is being rolled out in stages to manage the transition. Key dates to remember going forward include the July/August 2025 go-live for large taxpayers (extended to Nov 2025), July 2026 for medium businesses, and 2027 for small businesses, with full enforcement by 2028. Companies should treat these deadlines as the latest points by which they must be on board; missing them will invite sanctions and could disrupt business operations. By contrast, timely compliance will not only avoid penalties but can also streamline companies’ own processes (with faster invoicing and improved bookkeeping) and prepare them for a future where tax filings may eventually be automated via the data captured by e-invoicing. The e-invoicing era is a significant change, but with proper preparation and use of the official guidance and support available, Nigerian businesses can turn this compliance requirement into an opportunity for greater efficiency and transparency in their operations. [pwc.com], [assets.kpmg.com] [einvoice.firs.gov.ng] [punchng.com] [krestonpedabo.com], [vatit.com]

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• See also
  • E-Invoicing/Real Time Reporting – What can you find on VATupdate.com
  • Worldwide Upcoming E-Invoicing mandates, implementations and changes – Chronological
  • Country Profiles on E-Invoicing, E-Reporting, E-Transport, SAF-T Mandates, and ViDA Initiatives

• Join the Linkedin Group on Global E-Invoicing/E-Reporting/SAF-T Developments, click HERE
• Join the LinkedIn Group on ”VAT in the Digital Age” (VIDA), click HERE

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