Nigeria’s FIRS Launches Real-Time VAT Portal To Boost Digital Tax Compliance.
Nigeria’s Federal Inland Revenue Service (FIRS) has unveiled a groundbreaking real-time portal designed to track all VAT-eligible electronic transactions, marking a significant step in the nation’s digital tax transformation. The initiative, announced on 25 July 2025, mandates banks, card schemes, fintechs, and payment service providers to integrate with the platform, named the Transaction Monitoring System, to enhance tax compliance in Nigeria’s rapidly growing digital economy.
The portal, part of the FIRS Digital Transformation Strategy, requires financial institutions to route transactions through the VAT Rev Assure system, which calculates and remits VAT in real time before transactions are processed on the platform. For payment service providers like Paystack and Flutterwave, the system ensures VAT is either collected at checkout or calculated on the total transaction value, with both the VAT and gross payment amounts recorded. “This system represents a transformative leap in transaction visibility, fostering a fair and transparent digital marketplace,” said Zacch Adedeji, FIRS Executive Chairman.
The initiative builds on new tax laws enacted in June 2025 under President Bola Tinubu’s administration, empowering FIRS to automate tax processes. While these laws take effect in January 2026, the agency is leveraging existing powers under Section 25(4) of the FIRS Act to enforce compliance with a 30-day notice period. Non-compliance carries hefty penalties, including a ₦1 million fine for the first day of failure to grant system access, and ₦10,000 for each subsequent day.
The launch follows the introduction of the FIRS Merchant Buyer Solution (FIRSMBS), a centralised e-invoicing platform rolled out on 29 April 2025. The FIRSMBS, which supports the upcoming e-invoicing mandate starting with a pilot for large taxpayers in July 2025, aims to streamline VAT compliance for businesses. The platform uses a pre-clearance model, where invoices are validated and assigned unique identifiers before delivery, reducing fraud and enabling near real-time tax oversight.
Businesses must register with a Tax Identification Number and adhere to standardised formats like JSON or XML to issue e-invoices. The system offers benefits such as improved efficiency, reduced errors, and seamless integration with existing accounting platforms, supporting both large corporations and smaller enterprises. The phased rollout will extend to medium and small businesses following the initial pilot, ensuring broad adoption across Nigeria’s economy.
This move underscores Nigeria’s commitment to modernising its tax system, aligning with global trends in digital tax administration. By enhancing transparency and curbing tax leakages, the FIRS aims to bolster revenue collection while creating a level playing field for businesses in the digital marketplace.
