Lagos State Empowers Tax Agency to Recover Unpaid Taxes Through Banks and Employers

The Lagos State Internal Revenue Service (LIRS) has revealed its intention to utilize new substitution powers to recover unpaid taxes from defaulting taxpayers. The agency, led by Executive Chairman Ayodele Subair, will enforce these powers under Section 60 of the Nigeria Tax Administration Act (NTAA) 2025.

The LIRS will target individuals or organizations holding funds on behalf of tax defaulters who fail to settle their tax liabilities. The public notice issued on January 21, 2026, outlines the process, warning that failure to comply could lead to penalties, interest, enforcement actions, distraint, and possible prosecution.

Banks, financial institutions, employers, tenants, debtors, and business partners are mandated to remit specific amounts owed by defaulting taxpayers directly to the LIRS. Taxpayers are advised to settle their tax obligations promptly to avoid legal consequences.