FIRS has launched a transaction monitoring portal that mandates banks, fintechs, and payment providers to integrate their systems and share VAT‑eligible transaction data via APIs. This system allows continuous visibility into electronic payments subject to VAT, though FIRS doesn’t collect taxes directly through it .
The requirement gives FIRS real-time access to payment data and supports reconciliation of reported VAT figures against actual transactions taken place on platforms .
Legislative Backdrop & Timing
These changes are underscored by new tax legislation under President Bola Tinubu’s administration, slated to come into force in January 2026. However, FIRS is already implementing the system using existing legal authority, providing 30-day notices to financial institutions to comply .
Transactions valued above ₦5 million ($3,265) are prioritized, with encryption and AI-based validation incorporated into the system to ensure accuracy and data integrity .
Why It Matters?
Enhanced VAT Compliance
This monitoring portal is part of a broader effort, including the e‑invoicing system (FIRSMBS), to reduce VAT leakages and boost revenue by providing FIRS with transactional visibility in near real-time .
Starting July 2025, the FIRSMBS system will be piloted with large taxpayers (turnover ≥ ₦5 billion), before expanding to medium and small enterprises by December 2025 .
Broader Impacts on Banks and Fintechs
Financial institutions must register with FIRS’s platform and align with technical requirements, including encryption and submitting raw transaction data, especially for high-value transactions .
Firms that fail to comply could face regulatory scrutiny and penalties, especially once the new legislative measures take effect.
Context & Stakeholder Views
Reddit users and local experts have long advocated for improved transparency in financial flows. As one commenter noted:
A system that ensures institutions collect transaction blueprints from banks and financial institutions in real time. Meanwhile, users on tax reform discussions emphasized the goal of extending the tax net, especially collecting VAT from sectors previously beyond formal oversight .
Summary Table
Aspect Details
What system FIRS’s new Transaction Monitoring System requiring banks and fintechs to share VAT‑eligible transaction data
Legal basis Operational now via existing authority; broader legislative backing takes effect in January 2026
Scope & Threshold All VAT‑eligible payments; particularly transactions exceeding ₦5 million
Complementary systems Tied to the FIRSMBS e‑invoicing rollout starting with large taxpayers in July 2025
Expected outcomes Better compliance, reduced revenue leakage, improved transparency
What Should Banks & Fintechs Be Doing Now?
1. Register with FIRS’ portal for integration.
2. Integrate systems via APIs for VAT‑eligible data (encrypt data, support AI validation).
3. Prioritize high-value transactions above ₦5 million.
4. Ensure compliance readiness as more formal legislative penalties kick in.
FIRS is proactively deploying technology to monitor VAT collection more precisely and reduce evasion. Fintechs and banks are now key partners in this system required to submit transaction data to improve transparency and revenue collection.
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