The Lagos State Internal Revenue Service (LIRS) has announced plans to recover outstanding taxes from defaulting taxpayers by directing third parties—such as banks, employers, debtors, tenants, and business partners—to remit funds on behalf of defaulters.
The announcement, published on the LIRS website on Sunday, January 21, 2026, cites Section 60 of the Nigeria Tax Administration Act, 2025, which empowers the agency to enforce collection from anyone holding or owing money to a taxpayer who has failed to settle a final tax liability. The law covers unpaid Personal Income Tax (PIT), Capital Gains Tax (CGT), Stamp Duties, and Withholding Tax (WHT).
The notice explained that once a substitution directive is issued, the person served must remit the specified amount directly to LIRS. Banks and financial institutions must confirm compliance via the LIRS e-Tax platform, while employers, tenants, and other parties are required to withhold and remit the relevant sums. Those who do not hold or owe money to the taxpayer must notify LIRS in writing within the stipulated period.
LIRS further clarified that non-compliance with substitution notices is considered an offence and may result in penalties, interest, enforcement actions, and even prosecution. Defaulting taxpayers remain liable for any unrecovered balance, and the Service urged them to settle outstanding assessments promptly to avoid additional liabilities.
This move is part of LIRS’s efforts to ensure efficient tax collection and enhance compliance under the NTAA 2025 framework.
