Nigeria’s corporate world has been shaken by a legislative earthquake that is in the process of reshaping the country’s tax system. Last year saw four major pieces of legislation passed with the intention of modernising the tax system and, most of all, addressing poor tax receipts.
At the heart of those changes is a move to an e-invoicing system that will see all invoices passed through the country’s revenue services in real time to ensure complete transparency over all billing and income. A phased roll-out began in July 2025, starting with the largest taxpayers; now the focus has shifted to small and medium-sized enterprises.
‘You must invest in digitalisation to meet the requirements’
It is a massive undertaking, with significant implications for company finance departments as they adjust to using new software systems and managing the data they will inevitably amass. ‘In terms of implications for businesses, this means that if you were not investing in digitalisation, or digital transformation or digital infrastructure, then you must start thinking about doing that kind of investment to be able to meet the requirements,’ says Farida Kabir, a director and senior tax technology leader with PwC.
One thing company finance departments will need to acquire is the skills needed to cope with the new rules. Amid a slew of changes, both the Nigeria Tax Act and the Nigeria Tax Administration Act mandate that companies should move to e-invoicing and real-time transaction reporting using electronic devices and approved platforms.
No easy process
The process is particularly complicated. A service provider must generate an e-invoice, including mandatory data, using an ERP system. The invoice is converted into a standardised format and then sent to an ‘access point provider’ (APP) in real time to check the invoice is compliant with new rules. The invoices then go to the Nigeria Revenue Service (NRS) for validation before being returned to the APP for distribution to the original service providers and their clients.
The system is designed to combat fraud, provide transparency – all transactions are recorded by the NRS – and create efficiency in VAT returns.
Clearly, finance departments must adapt their skills. Toyin Olufon FCCA, a member of the Fintech Association of Nigeria and founder of the Techy Accountant, says large corporates are more than willing to put structures in place to train finance staff. ‘They’re very focused on minimising their tax liabilities so they don’t want to fall short,’ she says.
SME gap
Inside SMEs, the story will be different, with finance professionals expected to take action to fill the skills deficit themselves. ‘There’s a huge gap,’ adds Olufon.
The NRS has already conducted ‘train-the-trainer’ sessions for CFOs, providing an overview of digital tax administration and some practical training in using digital tools.
Regional implementation
- Kenya: 2022
- Ghana: 2022
- Egypt: 2022
- Zambia: 2024
- Nigeria: 2025
- South Africa: due 2028
Minimum skills, according to Olufon, will be the ability to use an ERP system. Others will need to acquire data-analytical skills. Given the complexity in the e-invoice process, finance teams will also need some cybersecurity knowledge.
But she suggests that finance departments may also need database management skills, as well as knowledge of AI. ‘It’s an important skill for every financial professional to have in the current age,’ she says.
‘They’re really trying to leverage technology to ensure transparency’
With the volume of data generated by the new process likely to be high, Kabir agrees that data science skills will be at a premium. ‘Data science encompasses all of those things – database management, data analysis, data engineering,’ she says. Those skills will be needed to manage the process and the data it generates but also exploit gain insights into clients and customers.
For Oyinda Akanbi FCCA, CFO at SYNLAB Nigeria, a healthcare company, the new system will mean ‘a big deviation’ from its usual communication with the NRS. ‘This is the first time they’re really trying to leverage technology to ensure transparency,’ she says.
Data concerns
For the SYNLAB finance team, there is still work to be done to be fully compliant. Because of data sensitivity, combined with many steps in the e-invoice clearance process, Akanbi is yet to pick a software partner that can provide assurance on cybersecurity. As a result, the company’s target implementation date has had to shift. ‘It’s very important we keep patient information as anonymous as possible,’ she says.
The company is also looking for more clarity on the process. At the moment, the law says service providers must collect the digital tax IDs of clients – corporate or individual. As SYNLAB’s clients are all individual consumers, that would entail enormous effort.
Akanbi remains confident, however, in her finance team’s ability to adapt. Her receivables team has recently trained with the NRS, so there is growing clarity on expectations.
‘Tax is taking centre stage in the technology conversation’
The opportunity to sift through new customer data from the e-invoicing process looks attractive. ‘That’s something that we would like to explore,’ she says. ‘We’ll see how the data presents itself.’
SYNLAB is not alone in still working out how to comply with the reforms, settling on software providers and training new staff. Advisers have been writing to the authorities on behalf of many clients seeking deadline extensions.
However, it is clear that the changes place a new focus on finance teams, their tax compliance and technology. Kabir says tax has, until now, always taken a back seat when it comes to businesses deciding on technology investment.
‘Tax is now at the centre, and it is taking centre stage in terms of that technology conversation.’
