Voluntary Compliance Key to Boosting Tax Revenue – FIRS

The Federal Inland Revenue Service (FIRS) has emphasized that voluntary tax compliance is the most sustainable way to improve Nigeria’s tax revenues.

Tayo Koleosho, Chief of Staff to the Executive Chairman of FIRS, made this observation during a two-day E-Invoice Post Go-Live workshop. He highlighted the limitations of relying heavily on audits to enforce tax compliance and introduced e-invoicing as an innovative tool to reduce the frequency and impact of audits on businesses.

Koleosho explained that FIRS is focused on increasing the use of voluntary compliance data to encourage taxpayers to fulfill their obligations willingly, thus minimizing the disruptive effects audits can have on businesses.

He noted that the adoption of e-invoicing aligns Nigeria with global best practices in the tax ecosystem and stressed the critical role of digitalization in enhancing tax compliance.

“As the economy grows, e-invoicing will support increased voluntary compliance, which directly boosts revenue collection,” Koleosho said. He explained the positive correlation between voluntary compliance and the service’s ability to generate more revenue for national development.

To safeguard against cybercrime, FIRS, with support from the National Information Technology Development Agency (NITDA), has strengthened security measures on the e-invoicing platform.

“The vetting process now includes integration, background checks, and assessments by NITDA to ensure data protection regulations and frameworks are fully observed,” he added.

Koleosho also noted that the role of the 16 Access Point Providers is to facilitate secure transmission of taxpayer data through their systems.