FIRS to launch e-invoice system for enhanced tax administration

The Federal Inland Revenue Service (FIRS) has announced plans to introduce the FIRS e-Invoice, a digital solution aimed at improving invoice management in accordance with the Tax Administration and Enforcement Act of 2007.

Dr. Zacchaeus Adedeji, Executive Chairman of FIRS, made the announcement on Wednesday during the LCCI-FIRS Organised Private Sector Stakeholders Engagement in Lagos, with the theme “Emerging Tax Matters.” Represented by Mrs. Oti Olaniyi, Acting Director of the Medium Taxpayers Department, Adedeji emphasized the need for innovation in Nigeria’s tax system.

The e-Invoice system is part of the service’s broader digital transformation strategy, designed to enable real-time validation and secure storage of transactions across business-to-business, business-to-consumer, and business-to-government sectors.

Adedeji also highlighted the evolving tax landscape in Nigeria, noting that recent reforms and organisational restructuring within FIRS present both challenges and opportunities.

He urged the nation to embrace reforms, leverage technology, and ensure transparency to create a tax system that supports sustainable growth and equitable development.

“Our collective efforts will pave the way for a more prosperous and resilient Nigeria.

“As we move forward, we encourage you to support these initiatives with constructive feedback and collaboration.

“By doing so, we can all build a stronger, more resilient economy that benefits everyone,” he said.

Adedeji also stated that the country which had gotten to a crucial juncture in its economic evolution, must explore various tax incentives to stimulate local industries.

He emphasised the need for transparency and effectiveness in the implementation of these incentives and evaluation of their impact by ensuring they aligned with national development goals.

He said that the informal sector, which constituted a large part of the country’s economy, posed unique challenges as many small and micro businesses operated outside the formal tax system.

He said to engage this sector effectively, the government would explore simplified tax regimes and registration incentives.

In his remarks, Mr Gabriel Idahosa, President, LCCI, urged FIRS to collaborate with the private sector and government to ensure that tax policies support business innovation and competitiveness.

Idahosa noted that recently, Nigeria’s tax system had undergone significant transformations driven by reforms and policy changes to boost revenue, simplify compliance and address critical fiscal challenges.

He said that under its new leadership, the FIRS had set ambitious goals to increase tax collection by 57 per cent, targeting a revenue of N19.4 trillion for 2024.

He noted that though the country’s current tax to Gross Domestic Product (GDP) ratio stood at 10.86 per cent, the government aimed to achieve a tax-to-GDP ratio of 18 per cent within the next three years through newly introduced tax reforms.

The LCCI president said that reaching the goal required concerted effort from both the public and private sectors, along with targeted reforms aimed at simplifying tax policies and encouraging compliance.

“There is also a growing need for collaboration between the private sector and the government to ensure that tax policies support business innovation and competitiveness.

“For instance, recommending tax breaks for wage increases and removing barriers to foreign currency-denominated transactions can create a more robust investment environment.

“As we move forward in 2024, 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.

“Yet, for these reforms to succeed, the government must foster trust through transparency and fairness, while businesses and citizens must embrace a culture of tax compliance,” Idahosa said