The Lagos State Internal Revenue Service (LIRS) has clarified that its authority to direct banks, employers, and other third parties to remit funds of tax defaulters is not new, but a long-established legal provision under Section 60 of the Nigeria Tax Administration Act (NTAA) 2025.
Tokunbo Akande, Special Adviser to the LIRS Chairman, explained that this mechanism is only activated when a taxpayer has an established and final tax liability. Banks, employers, tenants, and other third parties may be instructed to remit owed funds to the state government, but safeguards exist to prevent arbitrary application.
Akande stressed that the “power of substitution” is a lawful recovery tool, not unique to Lagos or Nigeria, and only applies in confirmed cases of non-payment. Failure to comply constitutes an offence under the Act.
The clarification follows public attention after LIRS issued Notice LIRS/003/01/2026, highlighting banks, employers, and other agents as responsible parties for remittance when taxpayers default, aiming to strengthen compliance and boost revenue collection.
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