Panic as Nigerian authorities move to debit personal bank accounts over unpaid taxes

Nigerians face yet another controversy surrounding the country’s tax laws amid Lagos Internal Revenue Service’s notice on the tax law implementation.

LIRS, in a notice seen by DAILY POST at the weekend, disclosed that the tax institution has power enshrined to it by Section 60 of the Nigeria Tax Act Administration to recoup unpaid tax through direct bank debit.

The Nigeria Revenue Service and the Presidential Fiscal Policy and Tax Reforms Committee have not debunked the report.

The chairman of the committee, Taiwo Oyedele, referred DAILY POST to his X statement, which noted that the move is the last resort for the tax authority.

“The power of substitution is a tax recovery mechanism that permits the tax authority to issue a directive to a third party (a ‘substitute’) to remit funds belonging to a defaulting taxpayer to settle a final, established, and unpaid tax liability.

“This power is only exercised after all legal and administrative processes, including appeals to the courts, have been exhausted,” he said in a reply to a frequently asked question on X.

He further explained that the power of arbitrary substitution is neither arbitrary nor discretionary, stressing that its use is strictly governed by due process.

Meanwhile, the latest clarification falls short of his earlier position, which states that the new tax laws did not empower anybody, federal, state, or local government councils, to debit personal accounts.

Meanwhile, economists and financial experts poured out their thoughts on the development.

Speaking, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf noted that there is a need to reconcile the conflicting positions.

Reacting to the development, Yusuf said while tax reforms were necessary, the issue of tax authorities directly accessing bank accounts required clearer explanations to avoid creating fear and confusion among Nigerians.