Lagos revenue agency clarifies power to seize funds from tax defaulters
The Lagos State Internal Revenue Service (LIRS) has confirmed its legal authority to direct banks, employers, and other third parties to remit funds owed to tax defaulters directly to the state. Tokunbo Akande, Special Adviser to the LIRS Chairman, emphasized that this is not a new policy but a long-standing legal provision. The clarification follows a public notice that has sparked discussion on social media. The notice outlines the “power of substitution” under the Nigeria Tax Administration Act, 2025.
What we know
- Tokunbo Akande explained that the LIRS only activates this mechanism when a taxpayer has an established tax liability.
- The process allows the LIRS to instruct third parties—such as banks, employers, tenants, and business partners—to remit funds due to tax defaulters.
- A public notice titled ‘Power of substitution pursuant to Section 60 of the Nigeria Tax Administration Act, 2025’ was issued by Ayodele Subair, Chairman of LIRS, and dated January 21, 2026.
- The notice states that failure to comply with a substitution directive is an offence under the Act, and outlines obligations and penalties for those served.
- The measure is part of the Nigeria Tax Administration Act, 2025, aimed at harmonising tax procedures and improving compliance nationwide.
