In a bold move to curb tax evasion and enhance transparency in Nigeria’s digital economy, the Federal Inland Revenue Service (FIRS) has unveiled a real-time Transaction Monitoring System designed to track Value Added Tax (VAT)-eligible online payments across the country.
The new system mandates all banks, fintech companies, payment service providers, and card schemes to integrate their transaction infrastructure with the FIRS monitoring portal. This integration will allow FIRS to gain real-time visibility into all electronic transactions subject to VAT, thereby improving audit processes and tax compliance enforcement.
According to multiple reports, including confirmations from TechCabal, VATUpdate, and RetailBankingAfrica, the portal is not a tax collection mechanism but a data intelligence tool powered by end-to-end encryption and AI-driven validation. It is aimed at ensuring proper assessment of tax obligations and reducing revenue leakages within Nigeria’s growing digital financial ecosystem.
“The implementation of this system is a strategic response to the increasing digitalization of the economy,” FIRS officials stated. “By having access to real-time data on VAT-eligible transactions, we can reconcile invoices, detect anomalies, and ensure all liable entities are meeting their statutory obligations.”
Industry experts view the initiative as a significant leap toward strengthening Nigeria’s tax infrastructure. It also aligns with the global trend of tax authorities leveraging technology to enhance efficiency and transparency in revenue generation.
With this move, all stakeholders—including banks, fintechs, and online payment platforms—are expected to comply with the integration directive immediately to avoid regulatory penalties. The system is particularly focused on ensuring that high-volume, technology-driven platforms contribute fairly to the national purse.
As Nigeria continues to seek innovative solutions to expand its non-oil revenue base, this development marks a critical step toward modernizing the nation’s tax administration and ensuring that the digital economy operates within the framework of fiscal responsibility.
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