The FIRS says the move modernises Nigeria’s tax system without weakening state revenue agencies.
The Nigeria Tax Administration Act (NTAA) has introduced a provision allowing banks and other financial institutions to act as third-party agents in the recovery of significant outstanding tax debts. The Act states that such assignments will only occur after all legal avenues, including notifications and enforcement actions, have been exhausted.
“The relevant tax authority may assign outstanding tax debts… to an accredited third party… in accordance with the provisions of this Act,” it reads.
Taxpayers must be formally notified when debts are assigned. The law also gives the tax authority the right to revoke the assignment at any time.
FIRS spokesperson Dare Adekanmbi clarified that the provision includes state revenue agencies, not just the federal body. “It does not in any way suggest a weakening of the powers of the tax authority,” he said.
Experts say the move reflects global best practices, though concerns remain over implementation. The NTAA marks a shift from reliance on legal proceedings to more direct recovery routes.