Oil & Gas sector prepares for e-invoicing rollout as FIRS engages stakeholders

The Federal Inland Revenue Service (FIRS) has reaffirmed its commitment to addressing critical challenges—such as infrastructure, stakeholder education, and cross-border integration—ahead of the national launch of its electronic invoicing (e-invoicing) platform, set for July 2025.

This assurance was given during a stakeholder engagement session held in Lagos with oil and gas industry players, as part of FIRS’ phased rollout of its e-invoicing initiative aimed at modernising Nigeria’s tax administration through digital transformation.

Mike Adoga, Acting Director of Tax Automation at FIRS, highlighted the potential of the e-invoicing system to deliver real-time transaction visibility across sectors, thereby boosting tax compliance.

“This is about the electronic, real-time exchange of invoices between businesses and their customers, powered by FIRS technology. The benefits—transparency, accuracy, and efficiency—are clear,” Adoga said.

Although the initial focus is on capturing Value Added Tax (VAT) at the 7.5 per cent rate, the system is also structured to handle other tax categories, including withholding tax, company income tax, and personal income tax—reflecting the scope of Nigeria’s newly approved tax legislation.

“Withholding tax operates like an advance payment on tax liabilities. Information about such transactions will also flow through the e-invoicing ecosystem,” he added.

Despite steady progress, Adoga acknowledged ongoing challenges, notably in taxpayer education, infrastructure deployment, and public trust. He noted that FIRS is tackling these through continuous stakeholder engagement.

“Infrastructure is a big ask. We’ve had to forecast the scale of storage, computing power, and servers needed. If every financial transaction or telecom activity were to be captured for tax purposes, the system must be built to handle that load,” he said.

Adoga stressed that ongoing forums like the Lagos session are vital for demystifying e-invoicing. “Many people have heard of electronic invoicing, but misconceptions still exist. These engagements are helping close that gap,” he said.

FIRS maintains that the platform is more than just a digital upgrade—it is a reform-driven tool aimed at closing revenue gaps, strengthening compliance, and aligning Nigeria’s tax processes with global standards.

Richard Kimeku, Director of FIRS’ Technology Department, clarified that the e-invoicing platform is not a payment tool but a data system that enhances transparency and accountability.

“It’s about capturing transactional data directly from taxpayers. It eliminates issues like turnover suppression by making transaction records fully visible,” he explained.

He also noted the platform’s wider applications. “The insights from this data can inform market intelligence, enhance national security, and help businesses understand purchasing patterns,” Kimeku added.

The system’s rollout began with large taxpayers and is gradually expanding to medium and small enterprises. While the national launch is scheduled for July, participation remains optional for now.

“We’re following a gradual adoption strategy—starting with large taxpayers, then moving down the chain,” Kimeku said.

Sadiq Arogundade, Lead Consultant on the project, confirmed that the system is ready and that several large taxpayers are already participating in the pilot phase. He added that the framework is designed for flexibility and global interoperability.

“It’s a fully API-driven ecosystem. Rather than building a commercial product, FIRS is enabling businesses to plug into the system and develop their own compatible tools,” Arogundade said.

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