Anxiety is spreading fast across Nigeria as reports emerge that tax authorities may move to directly debit personal bank accounts over unpaid taxes — a development that has triggered fear, confusion, and quiet withdrawals from banks.
The tension erupted after the Lagos State Internal Revenue Service (LIRS) issued a notice reminding the public that it holds legal powers to recover outstanding taxes through direct bank debits, relying on provisions in Nigeria’s tax administration laws. Since then, panic has been simmering.
Notably, neither the Nigeria Revenue Service nor the Presidential Fiscal Policy and Tax Reforms Committee has outright denied the report, further fueling public unease.
Reacting to the growing backlash, the committee’s chairman, Taiwo Oyedele, explained that what is being discussed is known as the “power of substitution.” According to him, this mechanism allows tax authorities to instruct banks or third parties to remit funds belonging to a tax defaulter — but only as a last resort, after all legal steps, including court appeals, have been exhausted.
He stressed that the process is not arbitrary, insisting it is tightly guided by due process. Still, many Nigerians remain unconvinced, especially since earlier assurances suggested the new tax laws would not permit government agencies to dip into personal accounts.
Economic experts say the mixed messaging is dangerous.
The CEO of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, warned that the conflicting explanations are already having real-world consequences. According to him, fear over possible account debits has driven some Nigerians to pull money out of banks, a move that could undermine trust in the financial system.
He argued that money sitting in a bank account doesn’t always belong to the account holder alone. It could be funds meant for contractors, suppliers, or third parties — raising serious questions about fairness and ownership if debits are enforced.
Yusuf cautioned that without clear judicial oversight, such enforcement could backfire badly, pushing people toward cash hoarding or foreign currencies and weakening financial inclusion efforts.
Adding to the concern, former president of the Chartered Institute of Bankers of Nigeria, Mazi Okechukwu Unegbu, described the move as outright dangerous. He questioned the legal foundation of any policy that allows agencies to access personal accounts without strict court authorization, warning it could erode confidence in both the tax system and the banking sector.
With controversies already trailing Nigeria’s new tax laws — including claims of altered gazetted documents — analysts say this latest scare risks turning tax reform into a public trust crisis.
For now, Nigerians are watching closely, fingers hovering over their bank apps, wondering whether the next alert will be routine… or something far more unsettling. 💳😰
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