The Lagos State Internal Revenue Service (LIRS) will now enforce tax recovery through third parties. The announcement follows a public notice dated January 21, 2026, on the LIRS website. According to the notice, LIRS is empowered under Section 60 of the Nigeria Tax Administration Act, 2025.
This section allows LIRS to direct anyone holding money for defaulting taxpayers to remit funds. The power of substitution covers unpaid Personal Income Tax, Capital Gains Tax, Stamp Duties, and Withholding Tax. The notice emphasizes that banks, employers, tenants, debtors, and business partners may be instructed to pay.
Once issued, a substitution notice legally requires remittance of funds to LIRS from the taxpayer’s accounts. Failure to comply constitutes an offence under the Act and may attract penalties and prosecution. Banks must remit the specified amount without delay and confirm compliance through the e-Tax platform.
Employers and agents must withhold funds due to defaulting taxpayers and remit them to LIRS promptly. If a party does not owe money to the taxpayer, they must notify LIRS in writing within the stipulated period. Affected parties may also object in writing to an assessment within 30 days of receiving the notice.
LIRS warns that defaulting taxpayers remain liable for unpaid balances, even after enforcement through substitution. Non-compliance can lead to distraint, penalties, interest, and legal action. LIRS urges all taxpayers to settle outstanding liabilities promptly to avoid enforcement actions. This initiative aims to strengthen tax compliance and improve revenue collection in Lagos State efficiently
