The Lagos State Government has announced plans to begin seizing funds belonging to defaulting taxpayers directly from their bank accounts and through third parties, including employers, tenants, debtors and business partners, as part of efforts to recover outstanding tax liabilities. The move is contained in a public notice issued by the Lagos State Internal Revenue Service (LIRS) on the “Power of Substitution pursuant to Section 60 of the Nigeria Tax Administration Act, 2025,” signed by the Executive Chairman of LIRS, Ayodele Subair, and dated January 21, 2026, in which the agency informed “the general public, particularly employers, financial institutions, business operators and tax agents, of the provisions of Section 60 of the Nigeria Tax Administration Act, 2025 (NTAA 2025) relating to the Power of Substitution vested in the relevant tax authority.”
According to LIRS, the law “empowers the Lagos State Internal Revenue Service to direct any person holding money on behalf of, or owing money to, a taxpayer who has failed to pay an established final tax liability when due, to remit such money to the Service in settlement (or partial settlement) of the outstanding tax,” describing the measure as “a lawful collection mechanism designed to ensure efficient recovery of unpaid taxes,” while warning that once a substitution notice is issued, recipients including banks, employers and business partners are “statutorily required to remit to LIRS the amount specified in the notice,” with failure to comply constituting an offence under the Act, even as the agency cautioned that it “reserves the right to apply the maximum penalties or seek criminal prosecution” but noted that affected taxpayers still retain rights to clarification, review, objection and dispute resolution under the law.