The Lagos State Internal Revenue Service (LIRS) has announced plans to invoke its statutory power of substitution under the Nigeria Tax Administration Act (NTAA) 2025 to recover outstanding tax liabilities from defaulting taxpayers.
Okay News reports that the agency issued a public notice outlining the application of Section 60 of the Act, following the federal government’s implementation of NTAA amid controversies over alleged alterations in the gazette copy.
Under Section 60, LIRS can direct third parties holding funds belonging to or owing money to a taxpayer to remit those funds to settle or partially settle unpaid taxes.
The provision applies only to established tax liabilities that have become final and remain unpaid despite being due.
“The Power of Substitution is a lawful collection mechanism designed to ensure efficient recovery of unpaid taxes, including Personal Income Tax (PIT), Capital Gains Tax (CGT), Stamp Duties and Withholding Tax (WHT) administered by LIRS,” LIRS stated.
Substitution notices may be issued when a taxpayer neglects or refuses to settle an established liability.
Notices may be served on third parties such as banks and other financial institutions, employers, tenants, customers, debtors, agents, or business partners.
Once served, recipients are legally required to remit the specified amount to LIRS from funds belonging to or payable to the taxpayer.
Any remittance is deemed to have settled the tax liability to the extent of the amount paid.
Financial institutions must remit without delay, confirm compliance through the LIRS e-Tax platform, and provide details of the taxpayer’s available balances and encumbrances.
Failure to comply constitutes an offence under NTAA 2025.
The move comes amid the rollout of Nigeria’s tax reform framework, with four new laws—the Nigerian Revenue Service Establishment Act, Joint Revenue Service Establishment Act (commenced June 26, 2025), Nigerian Tax Act, and NTAA—now in effect.
 has announced plans to invoke its statutory power of substitution under the Nigeria Tax Administration Act (NTAA) 2025 to recover outstanding tax liabilities from defaulting taxpayers.){kind=link}