The Executive Chairman of the Lagos State Internal Revenue Service (LIRS), Ayodele Subair, has dismissed claims that the agency plans to directly withdraw unpaid taxes from the bank accounts of Lagos residents, describing the narrative as misleading.
Subair made the clarification during an appearance on Arise TV on Tuesday, January 27, following widespread reactions to a recent LIRS statement on tax recovery enforcement.
Over the weekend, LIRS announced it would begin enforcing the recovery of outstanding tax liabilities from defaulting taxpayers through third parties such as banks, employers, tenants, debtors, and business partners.
The agency explained that the move is backed by Section 60 of the Nigeria Tax Administration Act, 2025 (NTAA 2025), which grants tax authorities the legal “Power of Substitution.”
In the notice, LIRS stated that the law empowers it to direct any person or organisation holding funds on behalf of a taxpayer — or owing money to a taxpayer — to remit such funds in full or partial settlement of established tax debts.
The policy covers taxes such as Personal Income Tax (PIT), Capital Gains Tax (CGT), Stamp Duties, and Withholding Tax (WHT).
The announcement triggered concerns online, with many residents interpreting it as an attempt by the government to access citizens’ bank accounts directly.
Addressing the fears, Subair stressed that the power of substitution is not a sudden or arbitrary action, but a last-resort legal process applied only after years of unresolved tax disputes.
According to him, taxpayers must first go through multiple stages of assessment, objections, reconciliation meetings, and legal proceedings before any recovery action is considered.
“The power of substitution is a legal instrument used to recover unpaid taxes that have gone through a long process of assessments and disputes,” Subair explained.
He noted that once assessments are issued, taxpayers are allowed to object, engage in reconciliation exercises, and seek resolution through tax tribunals. If disputes persist, cases can move through the High Court, Court of Appeal, and even the Supreme Court.
“At a point where there is no more traction, and the taxpayer becomes clearly recalcitrant, that is when we think of applying the power of substitution,” he said.
Subair added that the entire process often spans several years — sometimes up to five years or more — before enforcement is triggered.
“So when people say the tax authorities want to seize accounts, that is not a fair representation of what is happening,” he concluded.
The LIRS chairman maintained that the measure is designed to ensure compliance among chronic defaulters, not to target ordinary residents who are willing to meet their tax obligations.
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