New Tax Laws: NRS Makes E-Invoicing Mandatory for Businesses: Here’s How it Works
- Nigeria launches mandatory electronic invoicing system for large businesses, promoting digital tax administration
- MTN Nigeria becomes first company to transmit a live electronic invoice under the new system
- Medium and small businesses will gradually adopt e-invoicing by 2027, ensuring comprehensive tax compliance
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria has taken a decisive step toward digital tax administration with the launch of a mandatory electronic invoicing system for large businesses.
The Nigeria Revenue Service has officially rolled out its Merchant Buyer Solution, known as MBS, requiring selected taxpayers to generate, validate and transmit invoices electronically in real time.
Source: Facebook
The system went live on August 1, 2025, following a pilot phase that began in November 2024.
For now, the directive applies to large taxpayers, defined as companies with an annual turnover of N5 billion or more.
Out of an estimated 5,000 eligible firms nationwide, about 1,000 had already begun integrating with the platform within two weeks of launch.
Telecom giant MTN Nigeria became the first company to successfully transmit a live electronic invoice on the system. Other major players, including Huawei Nigeria and IHS Nigeria, are preparing to follow.
What e-invoicing really means
Under the new regime, invoices are no longer treated as simple digital documents such as 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 contains detailed transaction data, including supplier and buyer information, item descriptions, quantities, pricing, VAT, and total payable amounts.
Once a sales transaction occurs, the invoice must be automatically sent to the MBS portal for validation.
The system then verifies the data and returns a unique invoice number along with a QR code. Only invoices bearing this validation are considered legally compliant.
Without this confirmation, transactions risk being flagged as unverified, potentially triggering compliance issues, operational delays or penalties.
How companies will connect their systems
To manage the technical backbone of the project, the Federal Inland Revenue Service appointed CWG Plc as a certified system integrator.
Its role is to link 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 interrupting day-to-day business operations.
The objective is clear: move Nigeria away from manual filings toward transaction-level oversight.
By capturing VAT and other tax data in near real time, authorities aim to reduce under-reporting, eliminate invoice manipulation and close long-standing compliance gaps.
Who must comply and when
The rollout will happen in phases.
Large taxpayers, those earning N5 billion and above annually, are already required to adopt the system. Compliance is mandatory.
Medium-sized businesses with turnover between N1 billion and N5 billion are currently in the engagement phase, which will run through March 2026.
A pilot rollout is expected in the second quarter of 2026, with full go-live scheduled for July 1, 2026. Enforcement for this category begins in January 2027.
Smaller or emerging taxpayers, defined as businesses earning below N1 billion annually, have more time.
Their engagement phase starts in January 2027, go-live is slated for July 1, 2027, and enforcement will commence in early 2028.
Policymakers see the MBS platform as the foundation for a nationwide digital tax framework that will eventually cover all taxpayer categories.
Core requirements businesses must meet
According to CWG, businesses must address several immediate technical and procedural obligations.
First is mandatory adoption for eligible enterprises. Companies must confirm their classification and ensure readiness.
Second is real-time validation. The system requires instantaneous communication with the tax portal.
Any delay in generating the official invoice number could stall transactions at the point of sale.
Third is data consistency. Information sent to the tax authority must be structured, accurate and drawn directly from source systems such as SAP, Oracle or QuickBooks.
Poor integration or inconsistent data could expose companies to compliance risks.
The integration challenge
For many firms, the real hurdle lies in execution.
Buying standalone e-invoicing software is not enough. The critical task is seamlessly connecting that solution to existing accounting and ERP systems.
Manual uploads or siloed processes defeat the purpose of automation and may create fresh compliance vulnerabilities.
This is why a certification framework for system integrators was introduced. These approved partners serve as technical bridge-builders, handling the complex end-to-end integration required to link diverse business platforms with the government’s e-invoice portal.
Ripple effects across supply chains
The impact extends beyond individual companies.
Manufacturers depend heavily on distributors issuing validated invoices before payments can clear.
Banks process settlements and merchant payments that now hinge on real-time invoice verification.
Source: Twitter
If one link in the chain fails to comply, the disruption could ripple across the network.
Tax experts warn that exposure now depends not only on a company’s own readiness but also on how prepared its distributors, retailers and partners are.
As Nigeria accelerates its tax digitisation drive, e-invoicing is fast becoming more than a compliance exercise. It represents a structural shift in how transactions are monitored, taxes are collected, and business is conducted nationwide.
Key changes under new tax law
Legit.ng earlier reported that the Nigeria Tax Act (NTA) 2025, which took effect fully in January 2026, has introduced several changes to the country’s tax compliance framework, setting clearer filing timelines, payment obligations, and stiffer penalties for non-compliance.
The federal government said the reforms are aimed at improving revenue certainty, reducing ambiguity and strengthening enforcement across major tax heads, including Stamp Duty, Personal Income Tax (PIT), Value Added Tax (VAT) and Withholding Tax (WHT).
Under the Act, Stamp Duty provisions are now consolidated in Sections 124–127 of the NTA 2025, replacing the Stamp Duties Act, Cap S8 LFN 2004.
Source: Legit.ng
