What is e-invoicing?
E-invoicing means every invoice you issue must go through FIRS's system (called FIRSMBS) for validation before or after you send it to your customer.
What changes:
Before: You create an invoice, send it to your customer, done.
Now: You create an invoice → send it to FIRS for validation → FIRS approves it and gives you a reference number → you send the validated invoice to your customer.
Every approved invoice includes:
Invoice Reference Number (IRN)
FIRS cryptographic stamp
QR code for verification
Think of it like getting a stamp of approval on every invoice before it counts as official.
Why FIRS is doing this
The goal is transparency and control over taxable transactions.
What FIRS wants to fix:
Fake or manipulated invoices
Inconsistent VAT and tax reporting
Delayed or missing transaction data
Difficulty tracking who owes what
What it means for you:
Clearer audit trails
Fewer disputes over invoice authenticity
Real-time visibility into your tax obligations
Faster (but stricter) compliance checks
Who needs to comply?
FIRS is rolling this out in phases:
Phase 1: Large taxpayers (November 1, 2025)
You're in this group if:
Your annual turnover is ₦5 billion or more
You're registered with FIRS Large Tax Office (LTO)
You participated in the November 2024 pilot
Deadline: Already started November 1, 2025
Phase 2: Medium and small businesses (January 1, 2026)
You're in this group if:
You're VAT-registered
You don't qualify as a large taxpayer
Deadline: January 1, 2026
Phase 3: Non-resident companies (2026)
If you're a foreign company making taxable sales in Nigeria, expect to be included in 2026. Specific dates aren't confirmed yet.
Who's exempt?
Businesses below the VAT registration threshold are currently exempt, but FIRS may expand requirements later. Start preparing anyway.
What types of transactions are covered?
Different transaction types have different rules:
Business-to-Business (B2B) and Business-to-Government (B2G)
How it works: Pre-clearance (validate before sending)
Process:
Create your invoice
Submit it to FIRS for validation
Get your IRN and stamp from FIRS
Send the validated invoice to your customer
Important: Your customer can only claim VAT input credits if your invoice is validated through FIRS. No validation = they can't deduct VAT = unhappy customer.
Business-to-Consumer (B2C)
How it works: Post-reporting (report within 24 hours)
Applies to: Transactions over ₦50,000
Process:
Issue your invoice to the customer
Report the transaction details to FIRSMBS within 24 hours
FIRS sends you a QR-coded stamp for your records
Why 24 hours? FIRS wants real-time visibility into high-value retail transactions for accurate VAT tracking.
Cross-border transactions (imports/exports)
Already mandatory since February 2022. Electronic invoices must be verified by authorized banks and submitted through CBN's Trade Monitoring System (TRMS).
What happens if you don't comply?
The penalties are significant:
Technology deployment failure
₦1 million for the first day
₦10,000 for each additional day
Processing taxable supplies outside the system
₦200,000 administrative penalty
100% of the tax due
Plus interest at 2% above CBN's Monetary Policy Rate
Example: You process ₦10 million in sales without using e-invoicing. You could owe ₦200,000 penalty + ₦750,000 VAT + interest. That's nearly ₦1 million in penalties for ignoring the system.
How Kuda Business can help
Transaction tracking
Your Kuda account gives you clear records of all business income and payments—essential for accurate invoice reporting.
Payment reconciliation
Match invoices to payments easily with your Kuda transaction history, making it simpler to report to FIRS.
Record keeping
Download statements anytime to support your e-invoicing records and tax filings.
Getting ready for e-invoicing
If you're a large taxpayer (already live)
Register on the FIRSMBS platform immediately
Integrate your invoicing system with FIRS
Train your finance team on the new process
Test with sample transactions
Start validating all B2B and B2G invoices now
If you're medium/small (deadline: January 1, 2026)
Confirm your VAT registration status
Register on FIRSMBS before January 2026
Review your current invoicing process
Decide: will you integrate your software or use FIRS's portal?
Plan for the 24-hour reporting requirement on B2C sales over ₦50,000
Train your team before the deadline
Common questions
Q: Do I need special software for e-invoicing?
You can either integrate your existing software with FIRS's API or use FIRS's web portal manually. Integration is better for high-volume businesses.
Q: What if FIRS's system is down and I need to invoice urgently?
FIRS hasn't announced a formal backup process yet. Monitor their official channels for guidance on system downtime procedures.
Q: Can I still use my current invoice format?
Yes, but you must add the IRN, FIRS stamp, and QR code after validation. Update your templates to include space for these.
Q: How long does validation take?
In the pilot phase, most validations happened within minutes. Plan for possible delays during peak periods or system issues.
Q: What about invoices I've already issued?
Past invoices issued before your compliance date don't need retroactive validation. Only new invoices from your compliance date forward.
Q: Do I need to validate credit notes and debit notes?
Yes. Any document that affects VAT must go through the system.
Q: I'm a freelancer earning ₦30 million a year. Do I need to comply?
If you're VAT-registered, yes. If not, you're currently exempt but should prepare for possible expansion of requirements.
Need help?
E-invoicing technical support:
Contact FIRS directly or visit the FIRSMBS platform for documentation
Tax compliance questions:
Speak with a qualified tax advisor or the Nigeria Revenue Service
Kuda Business account support:
Chat with us in the app or email [email protected]
This article explains FIRS e-invoicing requirements based on current FIRS guidance and the Nigeria Tax Administration Bill. Requirements may be updated, so check FIRS official channels regularly and consult a tax professional for advice specific to your business.