Businesses race against dual tax deadlines as CIT filing, e-invoicing rules take effect

• Rush raises error risks, experts warn

Nigerian businesses, particularly large companies, are facing mounting pressure as they prepare to meet two major tax compliance obligations before the end of June. They are the filing of Company Income Tax (CIT) returns and compliance with the federal government’s new electronic invoicing (e-invoicing) regime.

Tax experts have warned that the convergence of both deadlines is placing significant demands on finance and accounting teams, increasing the risk of errors, delays and compliance breaches if adequate preparations are not made.

According to Chiazor Victor, the Head, Research at FSL Securities, the combination of CIT filing and e-invoicing requirements could increase the possibility of errors if businesses rush through preparation.

“Companies need to ensure that their financial records, invoices, and tax computations are consistent. Any mismatch between accounting records and tax submissions could create compliance issues,” he said.

The dual obligations come at a time when many companies are still adjusting their internal processes and technology systems to align with evolving tax requirements.

Under the new e-invoicing framework, companies with annual turnover of N5 billion and above are expected to comply with the digital invoicing requirement by June 30. The system requires businesses to generate and validate invoices through the tax authority’s electronic platform.

Industry experts say the new framework goes beyond routine tax reporting and could have direct implications for business cash flow.

This is because invoices validated through the platform will play a critical role in determining whether companies can claim Value Added Tax (VAT) input credits. Failure to comply could therefore affect a company’s ability to recover eligible VAT expenses, potentially increasing operational costs.

At the same time, many firms are preparing their annual Company Income Tax returns, a process that involves reviewing audited financial statements, reconciling accounts, calculating tax liabilities and ensuring compliance with relevant tax regulations.

According to tax professionals, handling both obligations simultaneously is proving challenging for many organisations.

They noted that while CIT filing and e-invoicing are individually important compliance requirements, managing both within the same period requires substantial coordination across finance, accounting and information technology departments.

“The overlap of these obligations means companies must focus on tax computations, invoice validation, transaction reporting and documentation at the same time,” a tax consultant familiar with the implementation process said.

Experts explained that the e-invoicing initiative requires businesses to integrate their accounting and invoicing systems with the tax authority’s digital platform. This often involves software upgrades, process reviews and employee training.

Meanwhile, preparing CIT returns demands a detailed examination of financial records to ensure that taxable profits are correctly computed and all necessary adjustments are made in accordance with tax laws.

The combination of these tasks within a limited timeframe has raised concerns that some companies could struggle to meet both deadlines successfully.

Tax advisers have therefore urged affected businesses to begin preparations early by reviewing accounting systems, updating reporting procedures and ensuring that relevant staff understand the new requirements.

They also stressed the importance of maintaining accurate financial records and carrying out internal compliance checks before submissions are made.

According to industry stakeholders, companies that delay preparations may face avoidable compliance risks, including filing errors, rejected submissions and possible regulatory penalties.

Despite the short-term challenges, experts believe the transition to electronic invoicing could bring long-term benefits to both businesses and government.

They said the digital system is expected to improve transparency, strengthen tax administration and reduce gaps in revenue reporting by providing real-time visibility into commercial transactions.

The move is also expected to support broader efforts to modernise Nigeria’s tax system and improve efficiency in tax collection.

Although the current e-invoicing requirement applies mainly to large companies with annual turnover of at least N5 billion, analysts noted that small and medium-sized enterprises should closely monitor developments as digital tax reporting is likely to be expanded to cover more businesses in the future.

For now, however, attention remains focused on the approaching June deadlines.

With both CIT filing obligations and e-invoicing compliance requirements converging at the end of the month, businesses are being advised to treat the period as a critical compliance window.

Experts warn that companies that fail to prepare adequately risk disruptions to their operations, while those that comply successfully will be better positioned to navigate Nigeria’s increasingly digital tax environment.