The Lagos Internal Revenue Service (LIRS) has announced plans to instruct Nigerian banks to debit the accounts of employers who fail to remit outstanding tax liabilities, in line with provisions of the Nigeria Tax Administration Act (NTAA).
The move was disclosed in a public notice issued by the agency on Sunday. LIRS said the measure is part of efforts to enforce compliance with the NTAA and other newly enacted tax laws that took effect on January 1, 2026.
According to the notice, LIRS is empowered under Section 60 of the NTAA to recover unpaid taxes by issuing substitution notices to third parties holding funds on behalf of defaulting taxpayers.
“Where a taxpayer fails, neglects or refuses to settle any established outstanding tax liability when due, LIRS may exercise its powers under Section 60 to direct banks and other financial institutions, employers, tenants, debtors, customers, agents or any person holding money on behalf of the taxpayer to pay the amount owed,” the notice stated.
It added that once a substitution notice is served, the recipient is legally required to remit the specified amount to LIRS from funds belonging to, or payable to, the defaulting taxpayer.
The revenue service clarified that the enforcement action targets employers who have failed to remit tax deductions and other statutory obligations, and not individual taxpayers acting in their personal capacity.
Meanwhile, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has previously dismissed concerns that the federal government intends to debit personal bank accounts over tax matters. He reiterated that enforcement measures under the new tax regime are aimed at improving compliance and plugging revenue leakages, not arbitrarily targeting citizens.
LIRS urged employers to regularise their tax records promptly to avoid enforcement actions, warning that continued non-compliance would attract statutory recovery measures under the law.