Nigeria Revenue Service Enforces Mandatory E-Invoicing for Large Businesses
Nigeria has embarked on a significant digital transformation in tax administration with the introduction of a mandatory electronic invoicing system for large businesses. The Nigeria Revenue Service has officially launched its Merchant Buyer Solution, requiring selected taxpayers to generate, validate, and transmit invoices electronically in real time.
System Launch and Initial Compliance
The e-invoicing system became operational on August 1, 2025, following a pilot phase that commenced in November 2024. Currently, the directive targets large taxpayers, defined as companies with an annual turnover of N5 billion or more. Out of an estimated 5,000 eligible firms nationwide, approximately 1,000 began integrating with the platform within the first two weeks of the launch.
Telecom giant MTN Nigeria achieved a milestone by becoming the first company to successfully transmit a live electronic invoice under the new system. Other major corporations, including Huawei Nigeria and IHS Nigeria, are in the process of preparing for compliance.
Understanding E-Invoicing Requirements
Under the new regime, invoices are no longer simple digital documents like PDFs. Instead, they are structured data files generated directly from a company's accounting or enterprise resource planning system and transmitted instantly to the tax authority. Each e-invoice must include detailed transaction data, such as:
- Supplier and buyer information
- Item descriptions and quantities
- Pricing and VAT details
- Total payable amounts
Once a sales transaction occurs, the invoice must be automatically sent to the MBS portal for validation. The system verifies the data and returns a unique invoice number along with a QR code. Only invoices bearing this validation are considered legally compliant. Failure to obtain confirmation can lead to compliance issues, operational delays, or penalties.
Phased Rollout and Compliance Timelines
The rollout of the e-invoicing system is being implemented in phases to ensure a smooth transition for all business sizes:
- Large taxpayers with an annual turnover of N5 billion or more are already required to adopt the system, with compliance being mandatory.
- Medium-sized businesses with turnover between N1 billion and N5 billion are currently in an engagement phase through March 2026. A pilot rollout is expected in the second quarter of 2026, with full implementation scheduled for July 1, 2026. Enforcement for this category will begin in January 2027.
- Smaller or emerging taxpayers with earnings below N1 billion annually have a more extended timeline. Their engagement phase starts in January 2027, with go-live slated for July 1, 2027, and enforcement commencing in early 2028.
Technical Integration and Challenges
To manage the technical aspects of the project, the Federal Inland Revenue Service appointed CWG Plc as a certified system integrator. Its role involves linking businesses' existing ERP, accounting, and invoicing platforms directly to the government's e-invoicing engine. This integration enables secure, automated transmission of transaction data without disrupting daily operations.
Businesses must meet several core requirements, including mandatory adoption for eligible enterprises, real-time validation with the tax portal, and data consistency drawn directly from source systems like SAP, Oracle, or QuickBooks. The integration challenge is significant, as buying standalone e-invoicing software is insufficient; seamless connection to existing systems is crucial to avoid compliance vulnerabilities.
Impact on Supply Chains and Broader Implications
The implementation of e-invoicing extends beyond individual companies, affecting entire supply chains. Manufacturers rely on distributors issuing validated invoices for payment clearance, while banks process settlements based on real-time invoice verification. Tax experts warn that compliance now depends not only on a company's readiness but also on the preparedness of its partners, distributors, and retailers.
This move is part of broader reforms under the Nigeria Tax Act 2025, which took full effect in January 2026. The Act introduces clearer filing timelines, payment obligations, and stricter penalties for non-compliance, aiming to improve revenue certainty and strengthen enforcement across major tax heads, including Stamp Duty, Personal Income Tax, Value Added Tax, and Withholding Tax.
As Nigeria accelerates its tax digitization drive, e-invoicing represents a structural shift in transaction monitoring, tax collection, and business conduct nationwide, marking a pivotal step toward enhanced fiscal transparency and efficiency.
