LIRS Moves To Debit Employers’ Accounts Over Unremitted Taxes
The Lagos State Internal Revenue Service (LIRS) has announced plans to recover outstanding tax liabilities by directing Nigerian banks to debit the accounts of defaulting employers who fail to remit taxes.
The move is based on provisions of Section 60 of the Nigeria Tax Administration Act (NTAA) and was outlined in a public notice recently issued by the agency. According to LIRS, the enforcement measure aligns with the implementation of the NTAA and other newly enacted tax laws that came into effect on January 1, 2026.
In the notice, LIRS explained that where a taxpayer fails to settle confirmed tax obligations when due, the agency is empowered to appoint third parties to recover the outstanding amounts on its behalf. These third parties include banks and other financial institutions, employers, tenants, debtors, customers, business partners, agents, and any individual or entity holding or owing money to the defaulting taxpayer.
Once a substitution notice is issued, the recipient is legally required to remit the specified amount directly to LIRS from funds belonging to or payable to the taxpayer in default.
The agency said the measure is aimed at strengthening tax compliance and improving revenue collection in line with existing laws.
Meanwhile, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has previously dismissed concerns that the government intends to arbitrarily debit personal bank accounts over tax issues, clarifying that enforcement actions would follow due process as provided by law.
