The Lagos State Internal Revenue Service (LIRS) will begin enforcing its statutory power of substitution under the Nigeria Tax Administration Act (NTAA) 2025 to recover unpaid taxes from defaulting taxpayers.
Under Section 60 of the NTAA, LIRS can legally direct third parties, including banks, employers, tenants, customers, or business partners, to remit funds owed to a taxpayer in settlement of outstanding tax liabilities. The provision applies only to confirmed and due tax obligations, covering Personal Income Tax, Capital Gains Tax, Stamp Duties, and Withholding Tax.
Once a substitution notice is issued, recipients are legally required to comply. Banks and financial institutions must remit funds promptly via the LIRS e-Tax platform, provide account details when requested, and failure to comply is an offence under the NTAA.
LIRS described the measure as a lawful mechanism to ensure efficient tax recovery, part of broader reforms under Nigeria’s newly implemented tax framework aimed at strengthening compliance and boosting government revenue.
