Thousands of businesses face penalties starting July 1 as the Nigeria Revenue Service (NRS) begins enforcing its e-invoicing mandate. Large companies with an annual turnover of N5 billion and above are required to comply, but many have yet to join the system.
Compliance Status
Speaking at a media briefing in Lagos, Olumide Akinsola, Country Director of DigiTax Nigeria, noted that while compliance among large taxpayers has improved, a significant number remain non-compliant. As of early 2026, over 1,000 out of approximately 5,000 businesses in the large taxpayer category had adopted the system, leaving the majority exposed to sanctions.
“The NRS tells us the results are encouraging, but there is a lot more work to be done. There is still a significant chunk of businesses in this cohort that are still outside,” Akinsola said.
How E-Invoicing Works
Under the framework, businesses must generate, validate, and submit invoices electronically in real time through the Merchant Buyer Solution (MBS) platform using accredited service providers. Each validated invoice receives an invoice reference number and a QR code for verification.
Consequences of Non-Compliance
Akinsola warned that non-compliance leads to more than regulatory fines. Businesses cannot claim VAT input tax credits on invoices not transmitted through the NRS platform. “It is impossible to claim VAT input credits if those invoices were not transmitted to the NRS system. Not being compliant means you are actually leaking revenue, because the input VAT you cannot claim back, you have to pay from your own pocket,” he explained.
Additionally, any VAT charge on an untransmitted invoice after the deadline becomes a penalty, with interest charged at two percent above the Central Bank of Nigeria’s (CBN) monetary policy rate (MPR).
Phased Rollout
Enforcement will widen from July to include medium-sized businesses with annual turnover between N1 billion and N5 billion. While stakeholder engagement begins immediately, enforcement for this category runs from January to March 2027. The third phase will cover emerging taxpayers with turnover below N1 billion, with enforcement starting in January 2028.
Broader Context
Akinsola said the e-invoicing program is part of a broader shift toward digital tax administration across Africa. Countries including Kenya, Zambia, Ghana, Rwanda, Egypt, and South Africa have adopted or are implementing similar systems. Estimates indicate Africa loses the equivalent of N20 trillion yearly to tax leakages and gaps, with e-invoicing as a key technology-driven response.
“The compliance level is improving. The stakeholders at the NRS are a little bit impressed with the traction, though there is much more work to be done,” he said.
Benefits for Compliant Businesses
Businesses that have adopted the system are seeing operational benefits beyond compliance. “Once businesses get past the initial investment and resistance, they begin to see the advantages. We are getting feedback from customers about how this is helping with cash flow and making VAT filings easier because they can generate schedules directly from their systems,” Akinsola said.
Expansion of Mandate
Akinsola also disclosed that the mandate now covers withholding tax in addition to VAT, although implementation details are still being finalized. DigiTax, a product of Namiri Technology Limited, is among fewer than 20 service providers accredited by the NRS as both a system integrator and access point provider. The company has onboarded more than 100 customers in Nigeria across sectors including financial services, oil and gas, energy, and manufacturing, and plans to expand into Ghana within the next few months.
