As part of efforts to cash in from the newly but controversial Nigeria Tax Administration Act, 2025, and boost revenue collection by clamping down on tax evaders, the Lagos State Government has announced the formal activation of sweeping enforcement powers that allow the seizure of funds belonging to tax defaulters through banks, employers, tenants and business partners.
In a public notice issued by the Lagos State Internal Revenue Service (LIRS), the government disclosed that the powers are derived from Section 60 of the Nigeria Tax Administration Act, 2025, which grants tax authorities the legal right to recover unpaid taxes directly from third parties linked to a defaulting taxpayer.
According to the notice, the policy—known as the Power of Substitution—authorises LIRS to direct any individual or institution holding money on behalf of a tax defaulter, or owing such a person money, to remit the funds directly to the state government.
LIRS explained that the measure applies where a taxpayer “fails, neglects or refuses to settle any established outstanding tax liability when due”, adding that it is aimed at ensuring the efficient recovery of unpaid taxes across Lagos State.
The agency stated that the power covers several tax categories administered by LIRS, including Personal Income Tax (PIT), Capital Gains Tax (CGT), Stamp Duties and Withholding Tax (WHT).
Business Hilights reports that many other states are likely to take the same step as part of drive to raise internally generated revenue (IGR) of their states with the empowerment from the Nigeria Tax Administration Act, 2025.
