FIRS Suspends the Application of Lien on Customers’ Bank Account

In the past two (2) years, the Federal Inland Revenue Service (FIRS) has been directing Nigerian banks to freeze the bank account of tax payers/customers whom the FIRS believe are in default in their tax compliance. The FIRS has been exercising this power erroneously on the basis of Section 49 of the Companies Income Tax Act (CITA), and Section 31 of the Federal Inland Revenue Service Establishment Act (FIRSEA). The two (2) provisions are similar, and they provide that the FIRS may, by notice in writing, appoint any person to be agent of a taxable person where such person is in possession of any money belonging to the tax payer, and where such agent fails to comply, the tax due shall be recoverable from such agent. The sections further provide that the provisions of the CITA and the FIRSEA with respect to objection and appeals shall apply to any notice given under this section as if such notice were and assessment.

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