The Federal Inland Income Service (FIRS) has said that the implementation of the electronic-invoicing (e-invoicing) system will increase Nigeria’s tax-to-GDP ratio by enhancing tax compliance, enhancing transparency and curbing income losses.

The e-invoicing, in line with the FIRS, is a service provider purchaser answer which gives digital illustration of transactions between suppliers and consumers, successfully changing conventional paper or digital paperwork resembling invoices, credit score notes, and debit notes.

The FIRS has, in current instances, deepened engagement on the e-invoicing forward of the phased roll-out with some chosen taxpayers.

At one other stakeholders’ engagement for consultants to giant taxpayers in Lagos, the Chief of Workers to the Govt Chairman of FIRS and Head of the Strategic Administration Workplace, Tayo Koleosho, reiterated the advantages of the system in enhancing transparency on the enterprise and tax administration facet.

In line with him, e-invoicing has helped globally in growing tax compliance as “there may be loads of inter-data alternate between tax authorities and companies.”

He disclosed that whereas compliance amongst giant taxpayers was already above 90 per cent, the nationwide common remained under 50 per cent resulting from enforcement challenges amongst smaller companies.

This, he said, is the place e-invoicing would assist by means of the automation of tax reporting and seamless information alternate.

“We hope that by July of this 12 months, we’ll go stay. The advantages of this technique are ease of doing enterprise, ease of tax administration, and ease of tax compliance. It’s a win-win for all,” he mentioned.

The Coordinating Director, Compliance/Enforcement Group at FIRS, represented by the Director of Discipline Operations Administration, Matthew Osanekwu, assured companies of information safety.

He added that Part 13A of the VAT Act mandates taxable individuals to difficulty invoices, with non-compliance attracting penalties. “Failure to difficulty a tax bill is an offense. The penalty is 50 per cent of the price of the transaction, and the issuance of invoices by unauthorised individuals can result in six months’ imprisonment,” he mentioned.

He added that the purpose is to “enhance our compliance hole, to enhance our tax-to-GDP ratio to 18 per cent, that the federal authorities envisages. Additionally, to make sure that taxpayers adjust to the provisions of the legislation.”

“Tax consultants should realise that change has come. FIRS is on a journey, and that journey is to turn out to be one of the trusted and environment friendly tax programs on the planet,” he mentioned.

Venture Supervisor for the e-invoicing initiative, Mohammed Bawa, said that tax consultants play a vital position in tax administration “as a result of they sit between the tax authority and the taxpayers.”

“This engagement is to enlighten them on the place we’re with the e-invoicing mission and to hunt their assist in guiding their purchasers by means of the method,” he mentioned.

He disclosed that over 21 African international locations, together with Ghana, Kenya and Rwanda, had already carried out the system.

“Nigeria presently ranks 171 out of 190 international locations within the ease of paying taxes. The one means to enhance on that is to attenuate human interplay in tax processes.

“We wish to enhance visibility into transactions so that every one tax filings could be reported electronically with out requiring bodily visits to tax workplaces,” he mentioned.