The Nigeria Tax Act (NTA) allows the Federal Internal Revenue Service (FIRS) to enforce the use of a real-time monitoring system called the Merchant Buyer Solution (MBS). The transition represents a major shift from Nigeria’s long-standing reliance on manual and delayed reporting systems.
“Each transaction carries a unique verification code and timestamp. Nothing moves unrecorded, and every record can be independently validated,” said Oluyemisi Daramola, Managing Partner at Bamidele Daramola & Co., in a LinkedIn post explaining how real-time invoicing works.
Before MBS, companies submitted VAT returns monthly through TaxPro Max, and invoices were not validated in real time. Tax reporting depended largely on self-declaration, and FIRS detected under-reporting only through periodic audits or reconciliation exercises months after transactions occurred. MBS does not replace TaxPro Max; it sits on top of it as a real-time verification layer that validates commercial transactions as they occur rather than after the fact.
According to tax technology experts, many of these same companies are quietly requesting extensions, struggling with system integration, data mapping, and getting clarity on what exactly the Federal Inland Revenue Service (FIRS) wants.
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The rollout began in late 2024 and formally went live on August 1, 2025. Under the current framework, companies with an annual turnover of N5 billion or more, about 5,000 large taxpayers nationwide, were required to begin integration. Within weeks of the launch, roughly 1,000 companies (about 20 percent of eligible taxpayers) commenced integration with the platform, including MTN Nigeria, IHS, and Huawei Nigeria.
But the transition has not been smooth. “Most of the companies are still in the process of implementation and still trying to apply for extension,” said tax technology expert Ayodapo Bamidele. Many large corporations are struggling with system integration, data mapping, and interpreting the exact technical expectations of the FIRS.
This system closed the gaps by allowing tax authorities to track sales volumes, VAT liabilities, related-party transactions, cross-border transactions, etc., hence joining the rest of the world by integrating technology to act as a watch.
“The government wants to simplify the tax administration system through harmonising the various tax legislations, which it has successfully achieved and is ready for implementation,” a senior officer at FIRS, who requests anonymity
“Efficiency is the obvious benefit. But the deeper impact is assurance. Continuous validation strengthens governance, enhances investor confidence, and aligns Nigeria’s reporting standards with global best practice,” stated Oluyemisi
The system is crucial for digitising our tax structure, modern businesses, and governments because it boosts efficiency by automating processes, cuts costs, improves cash flow via faster payments, and enhances compliance and transparency with real-time tracking and reduced errors/fraud, acting as a digital backbone for seamless, secure, and legally compliant financial data exchange. It standardises data, reduces manual work, and helps close tax gaps, making businesses more competitive.
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Digital tax monitoring requires serious internal upgrades for companies, even the large ones. Governance structures must mature. Systems must be able to connect securely and consistently. API failures or mismatched datasets can lead to reporting inconsistencies, penalties, or operational downtime.
Internal controls must shift “from procedural to proactive,” Daramola warned. Instead of reacting after audits, companies are now judged on the live accuracy of their systems.
Analysts say the system has not been in operation long enough, barely six months, to determine if revenue has increased. Even for companies already integrated, there is no baseline yet for comparison.
And increases in declared revenue could result from seasonal demand, price changes, or macroeconomic factors, not necessarily MBS.
Although not mandated yet, SMEs will likely follow in later phases, but tax experts say they can begin preparations now if they have the technical and financial capacity.
For now, the big question remains whether the agency itself is ready to support millions of smaller businesses, a challenge that will determine how far Nigeria can push real-time tax monitoring in the coming years.