LIRS Moves to Recover Unpaid Taxes Through Banks, Employers, Third Parties

The Lagos State Internal Revenue Service (LIRS) has announced plans to intensify the recovery of unpaid taxes by enforcing its statutory powers against defaulting taxpayers through third parties, including banks, employers, tenants, debtors, and business partners.

In a public notice dated January 21, 2026, and published on the LIRS website, the agency disclosed that it would apply the provisions of the Nigeria Tax Administration Act, 2025, to ensure compliance. The notice was signed by the Executive Chairman of LIRS, Mr Ayodele Subair.

According to the notice, Section 60 of the Act empowers the revenue service to direct any individual or organisation holding funds on behalf of a taxpayer, or owing money to such a taxpayer, to remit those funds directly to the government where the taxpayer has failed to settle a final tax liability.

LIRS clarified that the enforcement measure, known as the “power of substitution,” applies to unpaid Personal Income Tax, Capital Gains Tax, Stamp Duties, and Withholding Tax under its administration. The agency warned that affected third parties would be legally obligated to comply once served with the relevant notices.

The revenue service urged taxpayers to regularise their tax obligations promptly to avoid enforcement actions, reiterating its commitment to strengthening internally generated revenue while promoting fairness, accountability, and compliance within the state’s tax system