Thousands of large companies across Nigeria are racing against time to meet a critical June deadline that could redefine how businesses report taxes, as authorities push forward with a nationwide electronic invoicing system.
Under the new framework introduced by the National Revenue Service, firms with annual turnover above N5 billion are required to integrate their systems with a central e-invoicing platform or risk sanctions.
The reform marks a significant shift in Nigeria’s tax administration, moving away from traditional self-reporting to a system that allows near real-time monitoring of business transactions.
At the core of the initiative is the Merchant Buyer Solution (MBS), a digital layer that enables companies to generate and transmit invoices directly to tax authorities as transactions occur. Each invoice is authenticated instantly, creating a verifiable digital trail for regulators.
Speaking during a recent industry webinar, Mohammed Bawa, a senior official at the NRS, warned that companies that fail to comply by the June deadline would be classified as defaulters.
“It means the NRS has the authority to apply sanctions for non-compliance,” he said, while noting that timelines may still be adjusted depending on implementation challenges.
The policy is expected to affect roughly 5,000 large taxpayers nationwide. However, early data suggests a slow start, with only about 20 percent of eligible firms—around 1,000 companies—having begun integration.
Major corporations such as MTN Nigeria, IHS Towers, and Huawei Nigeria are among early adopters of the system.
For many businesses, the transition represents more than a regulatory update. It requires significant changes to accounting infrastructure, internal processes, and compliance workflows.
Before the rollout, companies relied on platforms like TaxPro Max to file value-added tax returns monthly, often based on self-declared figures. Verification typically occurred during audits, sometimes months after transactions were completed.
The new system alters that structure entirely, shifting compliance from periodic checks to continuous validation. Analysts say this could reduce tax evasion and improve government revenue by closing gaps in reporting.
However, the transition is not without friction. Businesses have raised concerns about the cost of system upgrades, data privacy risks, and the operational burden of maintaining real-time compliance.
“There are legitimate concerns about how much visibility regulators will have over business transactions,” said Eben Joels, a managing partner at Stransact.
Despite these concerns, tax experts argue that the long-term benefits could outweigh the challenges. According to Oluyemisi Daramola, a tax consultant, real-time invoice validation enhances transparency, strengthens governance, and aligns Nigeria with global best practices.
Globally, countries such as Italy, Brazil, and Mexico have already implemented similar systems, requiring invoices to be approved before transactions are completed.
Nigeria’s phased rollout will extend beyond large firms. Medium-sized businesses with turnover between N1 billion and N5 billion are expected to begin pilot implementation in mid-2026, with enforcement starting in 2027.
Smaller businesses will follow later, with full adoption projected by 2028, giving them more time to adapt to the digital system.
As the June deadline approaches, the success of the initiative will depend on how effectively authorities balance strict enforcement with technical support for businesses still navigating the transition.
