Nigeria’s Federal Inland Revenue Service (FIRS) at the weekend unveiled Transaction Monitoring System (TMS), a new portal designed to track all VAT-eligible electronic transactions as part of its sustained innovative measures to fully digitalise the nation’s tax administration.
Based on the initiative, banks, card schemes, fintechs, and payment service providers are expected to link to the platform to enhance tax compliance and by implication, improve the nation’s non-oil revenue generation,
The TMS requires financial institutions to route transactions through the VAT Rev Assure system, which calculates and remits VAT in real time before transactions are processed on the platform.
For payment service providers (PSPs) like Paystack and Flutterwave, the system ensures VAT is either collected at checkout or calculated on the total transaction value, with both the VAT and gross payment amounts recorded.
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Speaking on the latest digitalization initiative, Executive Chairman of the revenue service, Dr. Zacch Adedeji, enthused: “This system represents a transformative leap in transaction visibility, fostering a fair and transparent digital marketplace.”
The launch of the TMS followed the introduction of the FIRS Merchant Buyer Solution (FIRSMBS), a centralised e-invoicing platform unveiled on 29 April this year to support the upcoming e-invoicing mandate, starting with a pilot for large taxpayers in July 2025, aims to streamline VAT compliance for businesses.
The platform uses a pre-clearance model, where invoices are validated and assigned unique identifiers before delivery, reducing fraud and enabling near real-time tax oversight.
To be able to issue e-invoices, businesses must register with a Tax Identification Number (TIN) and adhere to standardised formats like JSON or XML. The system offers benefits including, improved efficiency, reduced errors, and seamless integration with existing accounting platforms, supporting both large corporations and smaller enterprises.
According to the FIRS, the phased rollout of the e-invoicing platform will extend to medium and small businesses after the pilot phase.
