The Nigeria Revenue Service (NRS) has said the phased implementation of the new Tax Act is designed to address potential challenges associated with introducing the revised tax regime.
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Speaking at an e-invoicing compliance workshop and stakeholders’ engagement organised by eTranzact in collaboration with the NRS, the Project Manager for the e-invoicing implementation at the agency, Mohammed Bawa, explained that the first year of the rollout was deliberately focused on large taxpayers.
According to him, concentrating on large businesses during the initial phase is intended to ease the transition process, strengthen system integration, and resolve operational bottlenecks before extending the framework to other taxpayer categories.
The workshop formed part of ongoing efforts to deepen digitalisation within Nigeria’s tax ecosystem. eTranzact, which has operated in the digital solutions space for over two decades, is among the approved service providers supporting the implementation of the e-invoicing initiative.
He said, “So from the NRS perspective, from the beginning of the project, we knew that there would be challenges. And that’s why we have phased out the implementation in three different phases, from the large taxpayers, to medium, to imaginary. And from my presentation, the timeline I presented, you can see that we have a three-year plan.
“So, within the last year, we’ve been speaking directly to only large taxpayers and organising so many engagements for them to ease the adoption process. Because we know that the transition is not going to be that easy. It may not be as smooth as we think. And that’s why our focus right now is how to support taxpayers on how best to comply and how easily they can comply.”
He also added, “And we also, on the NRS side, are providing so many channels for taxpayers to reach out. We are coming up with a simulation portal that will allow the taxpayers to come and simulate the generation and transmission of the invoice, even before they begin the implementation. We have an engagement portal on our website where you can schedule an engagement with us to answer as many questions as you want. So we are reaching out, the engagement is continuous, and we will continue to improve the system based on the feedback we receive.
“With respect to infrastructure, the NRS is fully ready. We have bought additional servers to address connectivity issues and data storage issues, and we’ll continue to do that. And that’s where we’ll first have the implementation, right? So we don’t expect all taxpayers to comply at the same time. So as we continue to implement, more taxpayers are joining, and we’ll continue to improve the system, increase the capacity, and address some of these challenges until we arrive at our destination.
“So there’s a public notice that was signed by the NRS today, which has given different dates for the different sectors. So this year, we are going to be focused on medium-sized taxpayers with a turnover between 5 billion and 1 billion. And we will do a secondary engagement for three months for the first quarter. We’ll do a pilot for another three months before we can now announce the goal line. And then, towards the end of the year and January next year, we will now enforce the compliance.”
Besides, Bawa revealed that NRS has accredited lots of service providers so as to help ease the challenges of compliance.
“And that’s why we have accredited so many service providers that will be there for the taxpayers when they’re having these challenges. And that’s why we are always advising taxpayers to leverage the services of these service providers.”
Enlightening stakeholders at the workshop, Bawa said the e-invoicing, which is the automation of the system, provides transparency, visibility, and cost savings, while at the same time reducing errors and gaining efficiency.
He further explained that “because everything is already captured digitally, audits become lighter, refunds get processed faster, and the risk of penalties drops significantly.”
He therefore said service providers like etranzact can help make the adoption of e-invoicing easy, seamless, and less painful for the taxpayers.
He also noted that with e-Transact, businesses don’t just meet regulatory requirements; they actually stay ahead of them.
“Because they have undergone the application process, they’ve demoed their solution to us. We have endorsed it, so we believe they are in the best position to support the implementation,” he said.
In his remarks, Abubakar Achimogo, Director, etranzact said the workshop is meant to provide insights on how service providers will collaborate as stakeholders and as partners in ensuring that the digitalisation process, which the government is starting daily, is actually sustained.
He said this is to ensure that all businesses within the ecosystem and the financial services industry, irrespective of the digital services, can have real benefits.
He added, “So now, in respect of the new invoicing, I actually don’t see any challenge with it. What we are moving away from is the manual process, and now digitalising the process of non-collections. And the platform is also very seamless. It is very user-friendly, regardless of your literacy level. It’s just guiding, and it’s good. So what this is also going to be doing is also protecting.
“This will also protect the average Nigerian from multiple taxes. Because in this particular case, as you are inputting and processing, you’re actually getting a notification saying exactly what you have paid for, and documenting that process as well. For eTranzact, we have a multiple application channel built within the middleware, which is also at the front end, that has enabled this and will enable this.
“So it’s very seamless, and I don’t think there’s any challenge with that. What I would just advise is more like with the taxpayers, coming up with a more structured approach within their own payment space on how they can realign their expenditures and payments, which easily can show what is taxable and what actually is not within the tax regime. In terms of impacts this will have on the economy, when you also look at how much revenue this will generate, because I know the government also is looking to see how they can also cut in on this for revenue and resource mobilisation and all of that,” he explained.
He also added, “And because it’s automated, there’s transparency. Because it’s automated, it’s online, and it’s real-time. So there are actually no windows for abuse.”
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