FIRS Engages Stakeholders on E-Invoicing Initiative to Boost Tax Compliance  

Mary Nnah
 
 
The Federal Inland Revenue Service (FIRS) has taken a significant step towards enhancing tax compliance in Nigeria with the launch of a stakeholder engagement forum on its e-invoicing initiative. The forum, which was held at the Radisson Blu Hotel in Lagos from Monday, May 26th to Tuesday, 27th, brought together representatives from the manufacturing and oil and gas sectors to discuss the implementation of the e-invoicing system.
 
According to Sadiq Arogundade, Lead Consultant for the FIRS MBS, the e-invoicing system is designed to automate tax compliance and reduce the effort required for proper bookkeeping.
Arogundade said further that the system is designed to automate tax compliance and reduce the effort required for proper bookkeeping.
“We have built an electronic invoicing system for taxpayers and businesses to manage their invoicing processes. But we need to ensure that we have all use cases, all feedback, all comments, and concerns of taxpayers handled while we are building the system”, he said.
 
Arogundade explained that the primary objective of stakeholder engagement is to gather requirements from taxpayers and businesses to refine the e-invoicing system.  He further elaborated on the benefits of the e-invoicing system, saying, “When you automate workflows, it will reduce the effort to do proper bookkeeping.”
“So, we want to be part of that bookkeeping lifecycle so that we can take the tax elements of that invoice and do the job for them”, he noted, adding that  this would not only reduce the administrative burden on businesses but also ensure accurate and timely tax compliance.
 
Mike Adoga, Acting Director of Tax Automation at FIRS, highlighted the potential of the e-invoicing system to deliver real-time transaction visibility across sectors, thereby boosting tax compliance.
“This is about the electronic, real-time exchange of invoices between businesses and their customers, powered by FIRS technology,” he said.
He noted further that the benefits include: transparency, accuracy, and efficiency.
 
The e-invoicing system is expected to capture Value Added Tax (VAT) at 7.5% rate, as well as other tax categories, including withholding tax, company income tax, and personal income tax.
 
Adoga noted that the system would help to close revenue gaps, strengthen compliance, and align Nigeria’s tax processes with global standards. “Withholding tax operates like an advance payment on tax liabilities,” he added. “Information about such transactions will also flow through the e-invoicing ecosystem.”
 
While acknowledging ongoing challenges, Adoga emphasised the importance of stakeholder engagement in demystifying e-invoicing and addressing misconceptions. “Many people have heard of electronic invoicing, but misconceptions still exist,” he said. “These engagements are helping close that gap.”
 
The FIRS is working with service providers to ensure seamless integration with the e-invoicing system.
Adoga encouraged businesses to take advantage of the system to improve tax compliance and reduce disputes.
 
As the implementation of the e-invoicing system progresses, the FIRS is confident that it will enhance tax compliance, reduce revenue leakages, and promote economic growth in Nigeria.
 
As stakeholders continue to engage with the FIRS on the e-invoicing initiative, it is clear that the system has the potential to transform tax compliance in Nigeria. With its benefits of transparency, accuracy, and efficiency, the e-invoicing system is set to play a crucial role in promoting economic growth and development in the country.