LIRS tax recovery enforcement begins as Lagos revenue service moves to recover unpaid taxes through banks employers and third parties

The Lagos State Internal Revenue Service has said it will begin strict enforcement of its statutory powers to recover unpaid taxes from defaulting taxpayers through third parties.

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In a public notice dated January 21 2026 and published on its official website the agency said the move is in line with provisions of the Nigeria Tax Administration Act 2025.

The Executive Chairman of LIRS Mr Ayodele Subair explained that the law empowers the Service to direct any person or organisation holding money for a taxpayer or owing a taxpayer to remit such funds to government once a final tax liability remains unpaid.

According to the notice the LIRS tax recovery enforcement powers are contained in Section 60 of the Act and apply to taxes administered by the Service. These include Personal Income Tax Capital Gains Tax Stamp Duties and Withholding Tax.

LIRS described the measure as a lawful and efficient collection mechanism aimed at strengthening compliance and safeguarding public revenue.

The Service said where a taxpayer fails neglects or refuses to settle an established tax liability when due it may instruct banks employers tenants debtors customers agents or business partners to pay funds owed directly to LIRS.

It added that once a substitution notice is issued the recipient is legally required to comply and remit the stated amount from funds belonging to the defaulting taxpayer. Failure to do so constitutes an offence under the law.

Banks and financial institutions were directed to remit affected sums without delay confirm compliance through the LIRS eTax platform and disclose available balances where required.

Employers tenants and other parties were also instructed to withhold the specified amounts from payments due to defaulting taxpayers and remit them within the timeframe stated in the notice.

LIRS noted that anyone who does not hold or owe funds to the taxpayer must inform the Service in writing within the stipulated period.

The notice further stated that recipients of substitution notices have the right to object to an assessment within 30 days in line with appeal provisions under the Act.

While the LIRS tax recovery enforcement process may lead to partial recovery the Service stressed that defaulting taxpayers remain liable for any outstanding balance not recovered.

It urged affected taxpayers to regularise their tax positions promptly to avoid penalties interest and further enforcement action.