LIRS Can Now Freeze Your Bank Account Without Warning - Here's How to Protect Yourself

Photo: Gloire Bingana

Ah, 2026 don start with gbege already! If you've been ignoring those LIRS tax notices thinking "nothing go happen," my friend, I have news for you. The Lagos State Internal Revenue Service just activated something called the "Power of Substitution," and honestly, it's scarier than a Nollywood horror movie.

Imagine waking up one morning, trying to withdraw money from your account, only to discover LIRS has frozen it because you owe them tax. No court case, no further notice - just straight-up account blockage. This is the new reality we're dealing with in 2026.

What Exactly is This "Power of Substitution"?

Think of it as LIRS playing debt collector, but with superpowers. Under the Nigeria Tax Administration Act, they can now go to your bank, your employer, or even your tenant (if you're a landlord) and say, "Oga, this person owes us money. Give us what belongs to them."

So if you owe ₦500,000 in taxes, LIRS can tell your bank to freeze that amount in your account immediately. They can tell your employer to deduct it from your salary. They can even tell your tenant to pay rent directly to them instead of you. Wahala dey o!

Real-Life Scenarios That Should Worry You

Scenario 1: The Salary Earner
Kemi works at a fintech company in Victoria Island. She's been owing PAYE tax from her previous job for two years. One day, her HR calls her - LIRS has instructed them to deduct ₦300,000 from her salary over the next few months. Her current employer now has no choice but to comply.

Scenario 2: The Small Business Owner
Emeka runs a popular restaurant in Lekki. He's been dodging his company income tax, thinking he's smart. LIRS goes straight to his bank and freezes his business account just before weekend rush. No money to buy ingredients, pay staff, or run the business.

Scenario 3: The Property Owner
Aunty Ngozi owns two houses in Surulere. She hasn't paid her property tax in three years. LIRS contacts her tenants directly, telling them to pay rent to the government instead of her. Imagine the embarrassment!

How Young Professionals Can Protect Themselves

If you're a young professional reading this, abeg, don't play with your taxes. Here's what you need to do:

• Know Your Tax Obligations: Whether you're employed or running side hustles on Instagram, understand what taxes you owe. Ignorance is no longer an excuse.
• Keep Proper Records: Save all your tax payment receipts. Screenshot them, print them, save them in your email. You'll need proof of payment.
• Don't Mix Personal and Business Finances: If you're running a business, get a separate account. This makes it easier to track what LIRS can access.
• Pay in Installments if Necessary: Can't pay everything at once? Contact LIRS for a payment plan. It's better than having your account frozen.
• Use Multiple Banks: Don't put all your eggs in one basket. Spread your money across different accounts and banks.

The Smart Move: Stay Ahead of LIRS

Look, nobody likes paying taxes, but this new power means LIRS isn't playing anymore. The smartest thing you can do is to regularize your tax status now before they come for you.

Here's your action plan:

• Visit the LIRS website or their offices to check your tax status
• If you owe back taxes, negotiate a payment plan
• Set up automatic tax deductions if you're employed
• For business owners, get a tax consultant - it's cheaper than the wahala LIRS will give you
• Always file your returns on time, even if you don't owe anything

What This Means for the Bigger Picture

Honestly, this Power of Substitution is both scary and necessary. On one hand, it's going to catch a lot of people off guard and cause serious financial stress. On the other hand, maybe it will finally make people take their tax obligations seriously.

The government needs money to fix our roads, provide electricity, and fund public services. If everyone pays their fair share, maybe we'll see better infrastructure and services.

Bottom Line

Don't be the person crying "they didn't warn me" when LIRS freezes your account. The warning is this blog post, the warning is that January 2026 public notice. Take action now.

Remember, LIRS doesn't send WhatsApp messages or call you on the phone to negotiate. By the time you hear from them through your bank or employer, the deed is already done. Be smart, be proactive, and keep your financial house in order.

What's your take on this new LIRS power? Are you going to sort out your tax issues now, or wait for them to come for your account? Let's discuss in the comments - but abeg, no advice on how to dodge taxes o. We're law-abiding citizens here!