The Federal Inland Revenue Service (FIRS) has intensified its engagement with key stakeholders in Nigeria’s oil and gas sector ahead of the July 25, 2025 rollout of its electronic invoicing (e-invoicing) system. This initiative, part of the broader digital transformation of the country’s tax administration, is aimed at boosting efficiency, enhancing transparency, and curbing tax evasion, particularly in sectors known for high-volume transactions and complex financial structures.
The e-invoicing project, formally known as the Merchant Buyer Solution (MBS), represents a shift toward real-time invoice verification, allowing tax authorities and relevant stakeholders to track transactions as they occur. According to FIRS Chairman, Zacch Adedeji, this innovation is one of several tools being introduced to streamline Nigeria’s tax system, improve voluntary compliance, and significantly reduce leakages in revenue generation.
The oil and gas sector, which remains Nigeria’s economic backbone, has been identified as a critical focus for the first phase of implementation. During a recent stakeholder meeting in Abuja, Adedeji emphasized the importance of working closely with oil companies to ensure a smooth transition. He noted that while the initial deployment of the e-invoicing system will be voluntary, the expectation is that all major players will adopt the platform over time.
“We are not imposing this solution overnight. What we are doing is partnering with the industry to provide a framework that benefits everyone — the government, the taxpayers, and the public,” Adedeji said. “The e-invoicing system will help ensure that what is declared matches what is actually transacted, eliminating the kind of discrepancies that have plagued our tax processes for years.”
The Merchant Buyer Solution is designed to support a variety of invoice formats including debit notes, credit notes, proforma invoices, and purchase orders. It will operate using an API-driven system that allows seamless integration with existing accounting and enterprise resource planning (ERP) software used by oil operators. This flexibility is meant to reduce barriers to adoption and minimize disruptions to ongoing operations.
FIRS officials revealed that several major oil and gas companies have already begun pilot testing the system, giving the tax agency valuable feedback to fine-tune the platform before the full rollout. These pilot projects are helping to identify potential challenges in integration, data migration, and user training.
During the engagement session, stakeholders from the oil sector raised pertinent concerns, particularly around data security, compatibility with international reporting frameworks, and the need for extensive capacity-building. FIRS responded by assuring the operators that the e-invoicing platform adheres to global standards such as the Universal Business Language (UBL), and that adequate cybersecurity protocols have been built into the system to ensure data protection.
Industry participants also emphasized the importance of regulatory alignment, especially for companies with multinational structures that report financials in multiple jurisdictions. FIRS noted that the new system was designed with such complexities in mind and would enable real-time validation of invoices while ensuring that all tax-related documentation conforms to Nigeria’s fiscal requirements.
Beyond compliance, the e-invoicing system is also expected to reduce operational inefficiencies. By eliminating manual invoicing and the risk of human error, companies can cut down processing times, resolve disputes faster, and reduce the administrative overhead tied to tax reporting and audits.
Analysts have welcomed the initiative, citing its potential to significantly improve Nigeria’s tax-to-GDP ratio, which remains one of the lowest globally. According to a recent report by the International Monetary Fund (IMF), digital tools such as e-invoicing have helped countries like Brazil and Mexico improve tax compliance and reduce fraud by significant margins.
The FIRS leadership believes the e-invoicing system will also enhance Nigeria’s reputation among investors by promoting fiscal transparency and reducing the informal financial practices that discourage foreign direct investment. “Our objective is not just to increase revenue but to do so in a way that builds investor confidence and fosters economic growth,” said Adedeji.
As the July deadline approaches, FIRS has committed to conducting more awareness campaigns, technical workshops, and capacity-building sessions. These will be targeted at both finance professionals and IT departments within oil firms, ensuring that adoption is widespread and smooth.
In conclusion, the FIRS engagement with oil and gas operators on e-invoicing adoption marks a significant step toward modernizing Nigeria’s tax infrastructure. While challenges remain, the willingness of stakeholders to collaborate suggests that the transition could be successful, laying the groundwork for broader implementation across other high-impact sectors. As Nigeria seeks to diversify its revenue base and build a more transparent financial ecosystem, initiatives like e-invoicing could play a pivotal role in achieving those goals.
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