In November 2024, the Federal Inland Revenue Service (FIRS) announced the planned adoption of the Merchant Buyer Solution (MBS) also called the e-invoicing initiative for enhanced tax administration and tax collection. This is a national initiative involving various government agencies, such as the Nigeria Customs Service (NCS), Central Bank of Nigeria (CBN), National Information Technology Development Agency (NITDA), etc., but is primarily driven by the FIRS. Electronic invoicing is simply a process of sending and receiving invoices electronically rather than through paper-based methods.
Nigeria will be adopting the clearance and reporting model of e-invoicing in line with the Pan-European Public Procurement Online (PEPPOL) framework. This model of e-invoicing is used for Business-to-Business (B2B) and Business-to-Government (B2G) transactions. The clearance model facilitates seamless creation, validation, and exchange of electronic invoices between transacting parties. Under this model, each invoice generated by taxpayers must include an invoice reference number (IRN), Quick Response (QR) code, and a digital signature to be considered valid for payment. The e-invoicing system automatically generates the IRN. For Business-to-Consumer transactions (B2C), FIRS is likely to adopt a simplified invoice/fiscalisation method that will involve real-time or near real-time transmission of transaction data. E-Invoices can be issued and processed in all currencies.
Download Relevant Resources from the E-Invoicing Webinar
Click on thumbnail to download
E-Invoicing FAQs
- What is the scope for the e-invoicing requirement? Does it cover outbound (sales) invoices, inbound (supplier) invoices, or both?
Answer
The e-invoicing system applies to both inbound and outbound invoices, covering domestic as well as cross-border transactions. Accordingly, every invoice must be routed through the e-invoicing platform. - Does the e-invoice implementation impacts services rendered by non-resident suppliers who are not VAT registered in Nigeria?
Answer
Yes, E-Invoicing will impact services rendered by non-resident suppliers who are not VAT registered in Nigeria. Any non-resident supplier that provides goods or services in Nigeria is required to register for VAT. - How does e-invoicing impact cross-boarder transactions, especially for companies that engage foreign vendors and issue invoices in multiple currencies?
Answer
Non-resident companies are expected to comply with e-invoicing requirements in Nigeria as long as they earn Taxable revenue from Nigeria. - Is it mandatory or optional to adopt E-invoicing?
Answer
Mandatory - Is the roll-out plan not too close as FIRS didn't carry out enough sensitisation as per the rollout plan?
Answer
The e-Invoicing rollout is set to commence in July, with large taxpayers being given a specific window to comply with the new regulations. During this period, the Federal Inland Revenue Service (FIRS) will ramp up its sensitization and awareness efforts, ensuring that all stakeholders are well-informed and prepared for the transition. - What is the onboarding date for the next batch of taxpayers after the large taxpayers?
Answer
All taxpayer categories can onboard now, but the first phase is mandatory only for large taxpayers. FIRS will announce commencement dates for subsequent phases. - What determines the categorization of companies as large or medium?
Answer
Annual Turnover - What is the deadline of implementation for the companies with turnover below ₦5 billion?
Answer
This will be communicated by FIRS. - If a company’s current year turnover forecast exceeds ₦5 billion, will it be classified as a large taxpayer?
Answer
Yes. Turnover thresholds will be determined based on your 2025 Tax Clearance Certificate. - At what stage should implementation begin?
Answer
Implementation should begin immediately. All taxpayers can get onboarded without waiting for the official go-live date using this link https://einvoice.firs.gov.ng/enablement - Will the FIRS issue a formal notice instructing the company to start compliance, or are we expected to proactively inform the FIRS of our intention to integrate?
Answer
The FIRS will notify taxpayers on when to enable e-invoicing through prescribed mediums as stipulated by relevant laws - Will FIRS subsidise the cost of implementing e-invoicing systems ?
Answer
FIRS will cover the cost of the APP/API. - What would be the estimated cost for a company to take on the e-invoicing platform?
Answer
This will depend on the taxpayer's current accounting system and technology capacity. - What do you think will be the major bottleneck at the implementation stage?
Answer
This depends on each organisation’s internal accounting framework and technical capabilities. - Is the Nigerian environment digitally ready for this initiative, considering factors such as internet connectivity, low awareness, and other challenges?
Answer
Yes. The solution was developed with the government unique peculiarities in mind. Taxpayers can generate invoices in a standardised format and transmit them to the e-invoicing platform in real or near–real time, subject to system availability. - How do e-invoicing systems handle sales invoice reversals or corrections due to errors like incorrect delivery or quantity?
Answer
Once an invoice is signed, it becomes a digital asset and can't be canceled. However, taxpayers have a 24-48 hour windWow for edits. Any subsequent changes must be effected through a credit or debit note.
The invoice schema includes a “billing reference” field, which should contain the Invoice Reference Number (IRN) of the original invoice. Credit and debit notes do not require prior FIRS approval, provided they are issued as e-invoices and reference the original IRN. - How will disputes be handled in cases where there is a failure to meet the contract schedule after an e-invoice has already been issued?
Answer
The e-invoicing platform is designed for data aggregation and does not manage dispute resolution. If a refund or modification to an issued invoice is required, the system allows the creation of credit or debit notes to record the necessary adjustment. - How will the e-invoicing process operate in practice if we adopt it while some customers are still non-compliant or do not yet have the necessary infrastructure?
Answer
The phased rollout does not require immediate exclusivity with e-invoicing–enabled vendors. You may continue doing business with suppliers who are not yet onboarded until the mandate applies to their category. Ensure, however, that any invoices you issue comply with FIRS specifications and are properly signed. - Is there a list of System Integrators and Access Point Providers for Nigeria? Are they currently PEPPOL enabled?
Answer
The list of Service Providers, including those that are Peppol enabled, will be published on the e-invoice website after the final evaluation. - With the July go-live date approaching, are existing System Integrators ready so that Access Point Providers (APPs) can begin transmitting data?
Answer
Yes they are ready. - How can one become an access point provider?
Answer
To be an APP, review the APP description on the e-invoice portal and consult the relevant NITDA guidelines. If your organisation meets the stated criteria and has the required capacity, it can proceed with registering as an Access Point Provider on the e-Invoice website.
Please refer to the NITDA guideline https://nitda.gov.ng/sdm_downloads/regulatory-guidelines-for-electronic-invoicing-in-nigeria/ - Can the APP selected in the onboarding form be changed.
Answer
Yes - Can we have the definition of the 4 access points and how they defer?
Answer
All Access Point Providers are assessed by FIRS and NITDA based on the same standards. The key differentiator for Access Points is their ability to support cross-border transactions via PEPPOL enablement, which is clearly indicated on the dashboard. - Will the e-invoicing system be integrated with the supplier's system or it's an independent system required irrespective of the existing system. If integrated, how will the integration take place?
Answer
The e-invoicing system is expected to integrate with existing taxpayers' accounting system. Kindly check the API documentation https://einvoice.firs.gov.ng/docs/introduction - Is there any possibility of a manual intervention instead of a ERP integration?
Answer
Manual upload is not directly supported on the MBS, which is a RESTful API-based system. However, some service providers have developed tools that enable invoice creation and upload through user-friendly interfaces. - While the digital aspect of e-invoicing offers faster and more streamlined tax and invoice processing, is cryptographic signing not vulnerable to different forms of fraud, particularly from internet fraudsters?
Answer
According to the authorities, robust anti-fraud measures are in place. All cryptographic credentials are generated by the FIRS root server, which provides each taxpayer with a public key and certificate for QR-code creation. The resulting QR code can be decrypted only with the corresponding FIRS private key, thereby preventing tampering and eliminating counterfeit invoices. - In the oil and gas industry, customers typically withhold VAT at source and remit it directly to the FIRS, leaving suppliers unable to offset input VAT against output VAT. Under these circumstances, what advantages does the e-invoicing framework provide to oil and gas companies?
Answer
VAT returns and payments are processed outside the e-invoicing platform. Input VAT claims and the corresponding payments should be submitted through the Tax Administration system. - In the case of banks receiving invoices from their suppliers, it appears the supplier completes the e-invoicing process and provides the bank with the invoice. Is the bank’s role then limited to matching the invoice details when reporting WHT and VAT?
Answer
The Supplier is primarily responsible for issuing e-Invoices. The Bank on the other being the customer would receive the invoice and file appropriate tax returns based on existing arrangement and policy. - What is outbound invoice for a Financial Service Industry?
Answer
This consist of invoices issued to customers for services rendered to them by the bank. - The Financial Services Industry primarily receives invoices from vendors. Are they also required to issue invoices for the services they render?
Answer
Entities in the financial services sector must submit all qualifying transactions for fiscalisation exclusively through the e-invoicing platform. - Why is withholding tax showing on the invoice? Why is the VAT being computed without considering WHT?
Answer
The E-Invoice is a replica of the standard invoice which are issued to customers and calculations are based on data inputed by the company. The VAT and WHT lines reflect the values as computed by the Company during the issuance of the invoice. - Which AI solution is capable of managing the entire e-invoicing process for a company?
Answer
MBS is a RESTful API-based system. However, some service providers have embedded tools manage the e-Invoicing process for companies through user-friendly interfaces. - For a business that is reliant on subscription, for example DSTV, how will e-invoicing work?
Answer
The use case is similar to other businesses, where invoices are issued for transactions as proof of income or expense. - How does e-invoicing support transactions involving related parties and the filing of Transfer Pricing returns?
Answer
E-Invoicing platform is different from Transfer Pricing Platform and their requirements for compliance differ. - Considering that the India GST implementation spanned 4–5 years, is Nigeria’s e-invoicing Phase 1 focused solely on B2B transactions, or does it also cover B2C? Additionally, what strategies are in place to create awareness among end-customers?
Answer
The E-Invoicing solution covers all categories of invoices (B2B,B2G,B2C,G2G). The approach adopted for creating awareness about E-Invoicing is through strategic stakeholders engagement, Electronic media publications, Mass Media campaign etc to reachout to all targetted audience. - For a business that buys from both small and big businesses who might not have been onboarded, how is the issue of input VAT handled?
Answer
The issue of input VAT claim on the system will only be activated when all taxpayers have been mandated and onboarded to use the system. - Provide more clarity on the product categorization for the purpose of e-invoicing.
Answer
Product categorization adheres to the World Customs Organization's (WCO) standard naming conventions. This facilitates seamless product identification for cross-border transactions and simplifies input VAT claims. - Are the official technical specifications for electronic submissions available? We are especially interested in the XML schema, as we have only found UBL guidance in JSON format?
Answer
Yes. This can be found here. https://einvoice.firs.gov.ng/docs/introduction - How will revenue earned via settlement be treated as invoice is not issued to customers, but based on the fee agreement?
Answer
The notification for fee deduction are to be reported through e-invoicing platform for fiscalisation.
For Questions and Inquiries, Please Contact
