The Lagos State Internal Revenue Service (LIRS) has announced that it will begin recovering unpaid taxes from defaulting taxpayers through third parties such as banks, employers, tenants, debtors, and business partners.
This was made known in a public notice dated January 21, 2026, and signed by the Executive Chairman of LIRS, Mr. Ayodele Subair.
According to the notice, LIRS is empowered by Section 60 of the Nigeria Tax Administration Act, 2025, to collect unpaid taxes by directing third parties who hold or owe money to a taxpayer to remit such funds directly to the agency.
LIRS explained that this power, known as “substitution,” applies when a taxpayer fails to pay a confirmed and final tax liability. The affected taxes include Personal Income Tax, Capital Gains Tax, Stamp Duties, and Withholding Tax administered by the agency.
The notice stated that where a taxpayer refuses or neglects to settle outstanding taxes, LIRS may instruct banks, financial institutions, employers, tenants, customers, agents, debtors, or business partners to pay any money owed to that taxpayer directly to LIRS.
Once a substitution notice is issued, the person or organisation served is legally required to remit the specified amount to LIRS from funds belonging to, or payable to, the taxpayer. Failure to comply with the notice is an offence under the law.
LIRS added that banks and financial institutions must remit the stated amount immediately, confirm compliance through the LIRS e-Tax platform, and provide information on the taxpayer’s account balance if requested.
Employers, tenants, agents, and other affected parties are also required to deduct the specified amount from payments due to the taxpayer and remit it to LIRS within the stated period.
However, if a person or organisation does not hold or owe money to the taxpayer, they must inform LIRS in writing within the given timeframe.
The agency further stated that affected parties have the right to object in writing to the tax