The Nigeria Revenue Service (NRS) e-invoicing framework requires specified categories of taxpayers to generate, validate and submit their invoices electronically in real time.
The NRS has launched a new electronic invoicing solution (e-invoicing) to modernize Nigeria's tax administration and improve revenue collection. The system, known as the Merchant-Buyer Solution (MBS), officially goes live on August 1, 2025, following a successful pilot program that began in November 2024.
Also read: NRS sets second quarter deadline for large companies to complete e-invoice compliance
Initially, the platform is being launched for large taxpayers, defined as companies with an annual turnover of N5 billion or more. Within the first two weeks, 1,000 (20%) out of 5,000 eligible firms had already started integration with the NRS-MBS platform. MTN Nigeria was the first company to successfully broadcast live electronic invoices, other leading companies such as Huawei Nigeria and IHS Nigeria are also preparing to follow suit.
What is e-challan?
It is an electronic invoicing program, where invoices are no longer just digital paper (like PDF). Instead, they are structured data sent directly to the NRS from the company's accounting software in real time.
E-invoice is a digital representation of the transaction between the supplier and the buyer, which contains the essential transaction details such as supplier and buyer information, item description, quantity, price, taxes and total amount.
Which system will be used for e-invoicing?
A major change in Nigeria's tax administration in 2025 was the rollout of mandatory electronic invoicing for large taxpayers under the government's flagship e-invoicing platform, Merchant Buyer Solution (MBS).
NRS receives invoices from businesses through the MBS (e-Challan) portal.
Also read:NRS sets new deadline to launch e-challan
How will companies connect their ERP to NRS?
FIRS appointed CWG Plc as the system integrator for the country's mandatory electronic invoicing programme.
As a systems integrator, the company will connect enterprise resource planning (ERP), accounting and invoicing platforms directly to the FIRS engine, enabling the secure transmission of structured transaction data without disrupting business operations.
It is a system that enables tax authorities to capture transaction data in real time, especially for Value Added Tax (VAT), thereby significantly reducing under-reporting, invoice manipulation and compliance gaps. By automating invoice issuance and reporting, MBS marks a decisive step away from manual filing toward digital, transaction-level oversight.
The central mechanism of this mandate involves direct integration of the taxpayer's existing accounting, ERP, or invoicing system with the NRS portal.
How does this work?
When a sales transaction occurs, the invoice should be automatically transmitted to the MBS (e-invoice) portal, which validates the data and returns a unique FIRS invoice number and a QR code.
This validated invoice, which now bears the FIRS seal of approval, is the only legally compliant document for the transaction. Non-compliance involves significant risks including potential penalties, loss of input tax credit and disruption of business operations.
Also Read;Nigeria targets 18% tax-to-GDP ratio through legal, digital restructuring
Who are the people required to integrate ERP?
Under the existing framework, companies with an annual turnover of N5 billion or more, which is estimated to be about 5,000 large taxpayers across the country, are required to adopt the platform. According to official data, within weeks of the launch, around 1,000 firms, or 20 per cent of eligible taxpayers, had begun the integration.
Although initially limited to large taxpayers, policymakers view the MBS e-invoicing system as a test case for eventual expansion into other sectors and taxpayer categories, establishing digital invoicing as a central pillar of Nigeria's tax modernization drive.
For medium taxpayers with turnover between N1 billion and N5 billion, the engagement phase is currently ongoing and will run until March 2026. The cluster is expected to go into pilot rollout in the second quarter of the year ahead of the official go-live date on July 1, 2026. Enforcement for this category is scheduled to begin in January 2027.
Emerging taxpayers, including businesses with turnover of less than N1 billion, have been provided a longer runway to adapt to the new digital requirements. Their engagement phase is scheduled to begin in January 2027, with completion date scheduled for July 1, 2027, and commissioning activities are expected to begin in early 2028.
What are the main requirements for the FIRS e-invoicing system?
According to CWG, these are the technical and procedural requirements that require immediate attention:
It is mandatory for large and medium sized enterprises to adopt it. Businesses should actively verify their status and compliance obligations.
real time verification
The system requires immediate communication. Any delay or failure in generating the FIRS invoice number means that the transaction is technically unverified, causing potential operational disruptions at the point of sale.
data consistency
Data shared with FIRS must be consistently structured and accurate, taken directly from the business's source systems (e.g., SAP, Oracle, QuickBooks, etc.). This is where the complexity of system integration becomes important.
What challenges will businesses face with FIRS e-invoice integration?
CWG said the challenge for many organizations lies in technical implementation. Simply purchasing a stand-alone e-invoicing software often fails to address the core problem: seamlessly and securely connecting that solution to a company's existing enterprise resource planning (ERP) or accounting software.
The firm said manual data transfer or siled systems defeat the purpose of real-time automation and compliance.
This is why FIRS established a certification process for system integrators. These certified partners are technical bridge-builders authorized to handle the complex, end-to-end integration required to connect a variety of business platforms to the FIRS e-Invoice portal.
As the Federal Inland Revenue Service (FIRS) introduces real-time invoice verification, companies are finding that their exposure depends not only on their own systems, but also on how prepared their distributors, retailers and partners are.
For manufacturers and banks, risk appears just where money should flow smoothly. Manufacturers remain dependent on distributors issuing valid invoices before payments are completed, while banks sit in the middle of those flows, processing settlements, merchant payments and reconciliations that now rely on real-time invoice verification.
“Large manufacturers rely heavily on extensive distributor networks, and ensuring that those distributors are compliant is critical to maintaining seamless operations,” Farida Kabir, Head of Tax Technology at PwC Nigeria, said while speaking at a recent tax technology webinar.
