Nigeria is taking a bold step in modernizing tax administration with the introduction of e-invoicing through the Federal Inland Revenue Service’s (FIRS) Merchant Buyer Solution (MBS). Designed to enable real-time monitoring of transactions, the system represents a major shift from the traditional manual and delayed reporting mechanisms. According to Oluyemisi Daramola, a tax expert, every transaction under MBS carries a unique verification code and timestamp, allowing authorities to validate commercial activity instantly and independently.
Before the rollout of MBS, companies reported VAT returns monthly via TaxPro Max, relying heavily on self-declaration. Audits and reconciliations, often conducted months later, were the primary ways FIRS detected under-reporting. MBS does not replace existing systems but sits on top of them, providing an extra layer of real-time verification that tracks sales, VAT liabilities, and cross-border transactions as they happen, aligning Nigeria with global best practices.
The transition, however, has not been without challenges. Many large corporations, including MTN Nigeria, IHS, and Huawei Nigeria, are still integrating the system and seeking extensions due to complexities in data mapping, system integration, and technical compliance. Experts warn that internal governance structures must evolve to ensure proactive monitoring rather than reactive reporting, highlighting that MBS requires both technological and organizational upgrades to function effectively.
Despite the hurdles, e-invoicing promises significant benefits. Automation reduces manual workload, improves cash flow, enhances compliance, and strengthens transparency. Continuous validation also boosts investor confidence and helps close tax gaps, making businesses more competitive. As a digital backbone for secure financial data exchange, MBS represents a step toward a more efficient, accountable, and modernized tax ecosystem in Nigeria.
Looking ahead, SMEs are expected to adopt e-invoicing in later phases. While the system is currently focused on large taxpayers, experts advise smaller businesses to prepare in advance to meet technical and financial requirements. The real test will be FIRS’ capacity to scale support for millions of smaller businesses, which will ultimately determine how far Nigeria can take real-time tax monitoring in the years ahead.
source: Business day