In an update published by Vanguard, the Federal Inland Revenue Service (FIRS) has officially launched an automated tax compliance platform designed to track and collect consumption taxes in real-time from all hospitality and entertainment operators. The new system integrates directly into point-of-sale terminals across hotels, restaurants, bars, and event centers nationwide. This administrative expansion is part of a broader government drive to rapidly boost non-oil revenue metrics and limit widespread tax evasion within the informal service economy.
Under the new administrative protocol, a standard consumption levy is calculated at the exact point of invoicing and routed instantaneously to the federation account. FIRS officials noted that the legacy manual filing systems allowed business owners to routinely underreport monthly sales volumes, costing the state billions in unrealized revenue. Corporate organizations failing to configure their electronic accounting systems to the FIRS digital gateway face severe financial penalties and immediate business closure.
While the government defends the rollout as a critical component of modernizing the fiscal framework, trade associations have raised concerns regarding compliance costs. Small and medium enterprises argue that maintaining high-speed digital connectivity and purchasing compliant point-of-sale hardware places an unfair financial burden on businesses struggling with high operational overheads.
Fleshing out the revenue framework, Leadership noted that the fiscal automation represents a significant shift toward consumption-based taxation, capturing a statement from an FIRS director who stated, “We are deploying technology to eliminate leakages, ensuring that taxes paid by consumers actually reach the government coffers.” Channels TV reported that service sector unions are worried about the sudden implementation curve, with a hospitality union representative declaring, “Enforcing real-time digital tax audits without providing stable power and internet infrastructure is putting the cart before the horse.”
**Echotitbits take:** Moving toward automated consumption taxes is structurally sound and aligns Nigeria with global best practices. However, deploying this during an economic slowdown means service businesses will likely pass operational compliance costs down to consumers, further straining disposable income levels.
Source: The Guardian – https://guardian.ng/business-services/new-tax-system-will-strengthen-compliance-create-efficient-revenue-system/, June 2, 2026
Photo credit: The Guardian
