A controversial move by tax authorities has triggered public anxiety after notices suggested that bank accounts could be debited to settle unpaid taxes under the new Nigeria Tax Administration Act (NTAA), which took effect on January 1, 2026.
The Lagos Internal Revenue Service (LIRS) has indicated that it may ask banks to debit accounts of employers or other agents holding funds for taxpayers who fail to remit obligations when due, as provided under Section 60 of the NTAA. That provision allows tax authorities to issue “substitution notices” directing third parties to settle outstanding liabilities on behalf of defaulting taxpayers.
The announcement prompted concerns among individuals and businesses about the potential for direct debits from personal accounts, although authorities have emphasised that existing tax laws do not permit arbitrary withdrawals without formal assessment and due legal process, including garnishee orders obtained through the courts.
Critics argue that the ambiguity surrounding the new enforcement mechanisms has sown confusion, with some Nigerians fearing undue interference with personal finances. Officials remain under pressure to clarify procedures and reassure the public that tax enforcement will adhere to legal safeguards.
