The Federal Inland Revenue Service (FIRS) has maintained that its recently launched electronic invoicing (e-invoicing) system will be a catalyst in increasing Nigeria’s tax-to-GDP ratio by improving tax compliance, enhancing transparency, and curbing revenue losses.
The Chief of Staff to the Executive Chairman of FIRS and Head of the Strategic Management Office, Tayo Koleosho, gave this projection on Monday at a stakeholders’ engagement for consultants to large taxpayers in Lagos.
According to him, the e-invoicing system scheduled for full adoption in federal tax administration offices by the middle of this year is expected to improve tax reporting, minimize evasion, and align Nigeria’s tax administration with global best practices.
The tax expert said: “Electronic invoicing helps to improve transparency, both on the business side and on the tax administrative side. Globally, it has helped to increase compliance because there is a lot of inter-data exchange between tax authorities and businesses.”
Koleosho pointed out that while compliance among large taxpayers was already above 90%, the national average remained below 50% due to enforcement challenges among smaller businesses.
He maintained that the adoption of the E-invoicing system would close this gap by automating tax reporting and ensuring seamless data exchange across the tax administration value chains.
On the timeline for implementation of the E-invoicing system, Koleosho said the FIRS’ management was hoping that by July of this year, it will go live and listed the benefits of the system as includingg ease of doing business, ease of tax administration, and ease of tax compliance all of which will assure a win-win for taxpayers and the government.
He promised the revenue agency’s support for businesses in integrating their accounting and enterprise resource planning (ERP) systems with the platform, and that technical assistance would be provided to business owners to facilitate a smooth transition.
The tax expert also described stakeholders’ responses to the E-invoicing system adoption as impressive with several large taxpayers already volunteering to be enrolled for the pilot phase.
In his presentation, Project Manager for the e-invoicing initiative, Mohammed Bawa, harped on the crucial role of tax consultants in ensuring its successful implementation.
He said: “Tax consultants play a critical role in tax administration because they sit between the tax authority and the taxpayers. This engagement is to enlighten them on where we are with the e-invoicing project and to seek their support in guiding their clients through the process.”
While underscoring the imperative of broad-based adoption of the system, Bawa stressed that in a country as large as Nigeria, with a population of over 200 million, stakeholder collaboration remained crucial for the success of any tax reform.
He described Nigeria’s adoption of e-invoicing within the broader global context as fiscally desirable for the country’s growth as over 21 African countries, including Ghana, Kenya, and Rwanda, had already implemented the system.
Bawa expatiated: “Nigeria currently ranks 171 out of 190 countries in the ease of paying taxes. The only way to improve on this is to minimize human interaction in tax processes. We want to increase visibility into transactions so that all tax filings can be reported electronically without requiring physical visits to tax offices.”
He noted that the initiative aligned with the current administration’s broader objective of increasing the country’s tax-to-GDP ratio from the current 10.3% to 18% within the next three years.
