Nigeria’s Federal Inland Revenue Service (FIRS) has unveiled a new real-time transaction monitoring system designed to enhance oversight of Value Added Tax (VAT) collections across the country’s booming digital economy.
The system, known as the Transaction Monitoring System, requires banks, fintech companies, and payment service providers to integrate with the portal, giving FIRS comprehensive visibility into VAT-eligible electronic payments.
Although the portal does not directly collect taxes, it allows FIRS to assess taxpayer thresholds, reconcile invoices, and audit tax declarations against bank transaction records.
FIRS Executive Chairman Zacch Adedeji described the system as a “transformative leap in transaction visibility” that promotes fairness and transparency for all digital marketplace participants.
This initiative is part of efforts under President Bola Tinubu’s administration to automate tax processes through recent legislation taking effect in January 2026.
However, FIRS is already implementing the system using existing legal provisions with a 30-day notice given to taxpayers.
Financial institutions must register on the portal and integrate their systems via APIs, while payment service providers are obligated to submit VAT data for every transaction.
Transactions exceeding ₦5 million (approximately $3,265) will be prioritized, with robust encryption and AI-based validation measures in place to ensure data security and accuracy.
The launch of the Transaction Monitoring System reflects Nigeria’s commitment to modernizing tax administration and addressing revenue leakages in an increasingly digital economy that has outgrown conventional compliance methods.
