Large businesses with yearly turnover of N5 billion and above risk penalties from July 1 as the Nigeria Revenue Service (NRS) begins enforcement of its e-invoicing mandate, with thousands of companies yet to comply with the new requirement.

Speaking at a media briefing in Lagos yesterday, Country Director of DigiTax Nigeria, Olumide Akinsola, said that although compliance among large taxpayers has improved, a significant number of businesses remain outside the system as the June 30 deadline approaches.

More than 1,000 out of the roughly 5,000 businesses in the large taxpayer category had complied as of early 2026, based on briefings from the NRS, leaving the majority exposed to sanctions once enforcement begins.

“The NRS tells us the results are encouraging, but there is a lot more work to be done. There is still a significant chunk of businesses in this cohort that are still outside,” Akinsola said.

Under the e-invoicing framework, businesses are required to generate, validate and submit invoices electronically in real time through the Merchant Buyer Solution (MBS) platform using accredited service providers.

Each validated invoice receives an invoice reference number and a QR code for verification.

Akinsola warned that the implications of non-compliance extend beyond regulatory fines, noting that businesses cannot claim VAT input tax credits on invoices that have not been transmitted through the NRS platform.

“It is impossible to claim VAT input credits if those invoices were not transmitted to the NRS system. Not being compliant means you are actually leaking revenue, because the input VAT you cannot claim back, you have to pay from your own pocket,” he said.

He explained that every VAT charge on an invoice not transmitted after the compliance deadline automatically becomes a penalty, while interest is charged at two per cent above the Central Bank of Nigeria’s (CBN) monetary policy rate (MPR).

The enforcement drive is expected to widen from July as medium-sized businesses with annual turnover between N1 billion and N5 billion enter the second phase of the rollout. While stakeholder engagement and compliance activities begin immediately, enforcement for that category will run from January to March 2027.

The third phase will cover emerging taxpayers with turnover below N1 billion, with enforcement scheduled to commence in January 2028.

Akinsola said the e-invoicing programme forms part of a broader shift towards digital tax administration across Africa, noting that countries including Kenya, Zambia, Ghana, Rwanda, Egypt and South Africa have adopted or are implementing similar systems.

He cited estimates indicating that Africa loses an equivalent of N20 trillion yearly to tax leakages and gaps, describing e-invoicing as a key technology-driven response to the challenge.

“The compliance level is improving. The stakeholders at the NRS are a little bit impressed with the traction, though there is much more work to be done,” he said.

He said businesses that have already adopted the system are beginning to see operational benefits beyond compliance.

“Once businesses get past the initial investment and resistance, they begin to see the advantages. We are getting feedback from customers about how this is helping with cash flow and making VAT filings easier because they can generate schedules directly from their systems,” he said.

Akinsola also disclosed that the mandate now covers withholding tax in addition to VAT, although implementation details are still being finalised.

DigiTax, a product of Namiri Technology Limited, is among fewer than 20 service providers accredited by the NRS as both a system integrator and access point provider.

The company said it has onboarded more than 100 customers in Nigeria across sectors, including financial services, oil and gas, energy and manufacturing, while it plans to expand into Ghana within the next few months.