FIRS to Introduce e-Invoice, Simplify Tax Regimes for Informal Businesses

Dike Onwuamaeze

The Executive Chairman of Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, has announced that the FIRS would soon introduce e-Invoice, which is a digital solution for managing invoices in line with the Tax Administration and Enforcement Act 2007

Adedeji, announced this yesterday in Lagos when he delivered the keynote presentation at the “Organised Private Sector (OPS) Stakeholders’ Engagement on Emerging Tax Matters,” organised by the Lagos Chamber of Commerce and Industry (LCCI).

Adedeji, who was represented by the Acting Director, Medium Taxpayers Department (South), Mrs. Otivbo Olaniyi, also said the federal government was exploring the simplification of tax regimes and registration incentives to bring in micro and small businesses into the tax net.

He said: “Soon, we will introduce the FIRS e-Invoice, a digital solution for managing invoices in line with the Tax Administration and Enforcement Act 2007.

“This initiative, as part of our Digital Transformation Strategy, will facilitate real-time transaction validation and storage, benefiting Business-to-Business, Business-to-Consumer, and Business-to-Government transactions.”

According to him, “the informal sector, which constitutes a large part of our economy, poses unique challenges.

“Many small and micro businesses operate outside the formal tax system. To engage this sector effectively, the government is exploring simplified tax regimes and registration incentives.”

He explained that the recent restructuring of the FIRS into three operational groups—Small/Emerging Taxpayers, Medium Taxpayers, and Large Taxpayers would allow for a more focused approach in managing and supporting different segments of taxpayers.

He added: “In summary, the emerging tax matters in Nigeria present both challenges and opportunities. By embracing reform, leveraging technology, and ensuring transparency, we can develop a tax system that supports sustainable growth and equitable development.

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

In his welcome address, the President of the LCCI, Mr. Gabriel Idahosa, said in recent times, Nigeria’s tax system has undergone significant transformations driven by reforms and policy changes to boost revenue, simplify compliance, and address critical fiscal challenges.

But Idahosa pointed out that despite these efforts, Nigeria’s current tax-to-GDP ratio stands at just 10.86 percent, far below the African average of about 15-20 percent.

He said: “The government aims to achieve a tax-to-GDP ratio of 18 percent within the next three years through the newly introduced tax reforms.

“Reaching this goal requires a concerted effort from both the public and private sectors, along with targeted reforms aimed at simplifying tax policies and encouraging compliance.”

In his goodwill message, the National President of the Institute of Chartered Accountants of Nigeria (ICAN), Mr. Davidson Alaribe, highlighted some significant concerns members of   the institute  are having about tax matters in Nigeria.

Alaribe, who was represented by Dr. Seyi Olarenwaju of ICAN, said one of these concerns bothered on clarity of tax regulations.

He said: “Many businesses grapple with the complexity of tax regulations. We believe that clearer and concise guidelines are essential in ensuring compliance and reducing the burden on tax payers.

“Professional accountants often face challenges keeping up with frequent amendments to tax laws. Such as expected changes in VAT, new Finance Act, and other tax policies.

“Many tax provisions in Nigeria are not clearly defined leading to various interpretations by tax payers and tax authorities thereby creating compliance risks.”