Nigeria e-Invoicing Mandate 2025 | MBS Pilot, Timeline & Compliance Guide

Nigeria is embarking to transform its tax administration landscape with the introduction of the Merchant Buyer Solution (MBS), an electronic invoicing (e-Invoicing) system driven by the Federal Inland Revenue Service (FIRS).

Announced in November 2024, the MBS aims to enhance tax compliance, reduce revenue leakages, and promote transparency across Business-to-Business (B2B), Business-to-Government (B2G), and Business-to-Consumer (B2C) transactions.

With the pilot phase scheduled for July 2025, e-Invoicing solution providers have a unique opportunity to support businesses in navigating this regulatory shift.

As the pilot phase approaches in July 2025, businesses must understand the system?s scope, requirements, and implications to ensure compliance and leverage its benefits.

> Timeline and Phased Rollout

The MBS rollout is structured in phases to facilitate a smooth transition:

The pilot phase, expected to start on July 1, 2025, is currently in testing with select large taxpayers, as confirmed by recent reports.

However, the timeline depends on presidential approval of the Nigeria Tax Bill and Nigeria Tax Administration Bill, which introduces some uncertainty.

> Technical Requirements

To comply with the MBS, businesses must adopt systems meeting specific technical standards:

- Invoice Formats: E-invoices must use XML or JSON formats, adhering to the BIS Billing 3.0 Universal Business Language (UBL) schema (VATupdate Nigeria Platform).

- Mandatory Fields: Invoices require 55 fields, including:

• Supplier and buyer details (including VAT numbers)
• Item descriptions, quantities, prices, and taxes
• Invoice Reference Number (IRN), QR code, and digital signature

- Validation Process:

• B2B and B2G: Invoices require pre-clearance by the FIRSMBS platform, receiving Clearance Serial Identification (CSID) and IRN within 2-4 hours.
• B2C (> ?50,000): Invoices must be reported to FIRS within 24 hours.

- Integration: Businesses must connect to the MBS platform via RESTful APIs for automated submission and validation.

- Security: Invoices are secured with AES-256 encryption, TLS 1.3, and ISO 27001-compliant access controls, ensuring compliance with Nigerian Data Protection laws.

- Currency Support: The system supports all currencies, facilitating international trade.

> Legal Framework and Compliance

The MBS mandate is grounded in:

• FIRS Establishment Act 2007 (Sections 25, 26): Authorizes electronic tax systems.
• National Information Technology Development Act 2007: Supports technological infrastructure.
• NITDA Regulatory Guidelines for e-Invoicing (2024): Mandates accreditation of Access Point Providers (APPs) and System Integrators (SIs).

> Non-compliance incurs severe penalties

These measures underscore the importance of robust compliance strategies.

> Immediate Actions for Large Taxpayers

If your business is a large taxpayer (turnover ? N5 billion), act now:

• System Readiness: Ensure ERP systems are compatible with MBS APIs.
• Pilot Participation: Engage in the July 2025 pilot to familiarize with processes.
• Expert Support: Partner with e-Invoicing solution providers for seamless integration.

Medium and small enterprises should start preparations to avoid last-minute challenges by January 2026.

> Final thoughts

Nigeria?s e-Invoicing mandate, starting its pilot in July 2025, offers businesses a chance to streamline operations and ensure tax compliance. Act now to prepare and let our e-Invoicing solutions help you navigate this transition seamlessly. Visit our global e-Invoicing webpage to learn more.