FIRS to implement B2B and B2C e-invoicing platform to double VAT revenues
The Nigerian tax authority, Federal Inland Revenue Service (FIRS) has reconfirmed its intention to introduce mandatory e-invoicing. This is part of its 2024 Emerging Tax Matters review.
This will include a new “FIRS e-Invoice” platform to streamline invoice management in alignment with the Tax Administration and Enforcement Act. It will target Business-to-Business (B2B), Business-to-Consumer (B2C), and Business-to-Government (B2G) transactions.
Nigeria’s fiscal policy is at a critical juncture; the drive to expand the tax net, streamline the system and boost compliance is essential for securing Nigeria’s economic future. FIRS wants to trigger the 2007 Tax Administration and Enforcement Act to enforce digital reporting perhaps as soon as 2025. FIRS has set a target to increase tax collection by 57 per cent, targeting a revenue of N19.4 trillion for 2024.
In 2023, Nigeria’s governmental review had identified the implementation of e-invoicing as a key strategy to double VAT revenues. A form of mandatory e-invoicing is already in place with the Central Bank for clearing payments.
No firm timing has been provided by the Fiscal Revenues Committee yet.
Jan 2022 FIRS integrates to taxpayer accounting systems
Nigeria’s Federal Inland Revenue Services (FIRS) has been empowered to live connect its ATAS tax connector with taxpayers accounting systems. This technology would allow FIRS to review transactional data at the source ERP or accounting system to help detect missing Value Added Tax.
Check VAT Calc’s global live VAT invoice transaction and e-invoice reporting tracker to see where else real-time submissions of invoices is being implemented.
Automated Tax Administration System (ATAS)
FIRS now has the powers to implement ATAS s 30 April 2021.
ATAS enables the automation of tax investigations and audit and the collection of data. This would include access to cloud records, and outsourced accounting providers. Taxpayers would be given 30 days notice of an ATAS implementation. Refusal to allow the FIRS connect to the taxpayer’s system attracts a penalty of N25,000 in the first month and N10,000 for every subsequent month in which the default continues.
Practical questions around compatibility and integration between ATAS and taxpayer systems are not address.
