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Lagos Freezes Business Accounts Over Tax Debt

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  Published in Business and Finance on Thursday, February 5th 2026 at 15:45 GMT by legit
      Locales: Lagos, NIGERIA

Lagos, Nigeria - February 5th, 2026 - The Lagos State Government (LASG) has issued a stern warning to businesses operating within its jurisdiction, signaling a significant escalation in tax enforcement efforts. A recently released public notice, circulated to all financial institutions, directs banks to freeze the accounts of companies with outstanding Business Premises Tax (BPT) liabilities. This move underscores the LASG's commitment to bolstering internally generated revenue (IGR) and funding crucial developmental projects across the state.

The directive, confirmed by sources within the Lagos State Internal Revenue Service (LIRS), represents a renewed push to improve tax compliance. While the LASG routinely encourages voluntary tax payments, this latest action signifies a shift towards more aggressive enforcement mechanisms. The scope of the freeze is potentially widespread, encompassing a diverse range of businesses from small and medium-sized enterprises (SMEs) to large corporations. The specific thresholds triggering account freezes remain confidential, but LIRS officials indicate that any outstanding BPT liability, regardless of size, could be grounds for action.

A Necessary Measure for Sustainable Development?

The LASG defends the measures as essential for funding critical infrastructure and public services. Lagos, as Nigeria's economic hub, faces immense pressure to maintain and improve its infrastructure - roads, public transportation, healthcare, and education. A significant portion of this funding relies on robust IGR. According to the Lagos State Ministry of Finance, BPT contributes substantially to the state's annual revenue, but consistent underpayment and non-compliance have historically hampered budgetary goals.

"We understand that businesses may face economic challenges, but consistent tax evasion undermines our ability to deliver vital services to the citizens of Lagos," stated Dr. Adebayo Olufemi, Commissioner for Finance, in a press conference earlier today. "This isn't about punishing businesses; it's about ensuring equitable contributions to the collective good. We've provided ample opportunity for businesses to remit their taxes and utilize available payment channels. This action is a last resort for those who have consistently ignored their obligations."

Impact on Businesses and the Economy

The potential economic fallout from the account freezes is already causing concern among business owners and industry groups. The Lagos Chamber of Commerce and Industry (LCCI) has urged the LASG to exercise caution and consider a phased implementation of the enforcement, particularly for SMEs already grappling with post-pandemic recovery and inflationary pressures. They advocate for a more collaborative approach, involving dialogue and potential payment plans.

"While we acknowledge the importance of tax compliance, a blanket freeze on accounts could cripple many businesses, leading to job losses and economic disruption," warned Mr. Gbenga Adebayo, Director-General of LCCI. "We urge the government to prioritize engagement and offer viable solutions for businesses struggling to meet their tax obligations."

How Businesses Can Verify Compliance The LASG has provided a convenient online portal for businesses to check their tax clearance status and outstanding liabilities. Accessible at [ https://lasg.gov.ng/ ], the Lagos State Service portal allows businesses to input their registration details and access real-time information regarding their BPT payments. The LIRS also encourages businesses to visit their zonal tax offices for personalized assistance and clarification.

Precedents and Future Expectations

This isn't the first instance of a Nigerian state government employing stringent tax enforcement measures. Several other states have implemented similar strategies, utilizing bank mandates to recover outstanding tax revenue. However, the scale of Lagos's economy and its position as a national business center amplify the potential impact of this action.

Tax analysts predict that other states may follow suit, intensifying pressure on businesses nationwide to prioritize tax compliance. Furthermore, the LASG is exploring the implementation of advanced data analytics and artificial intelligence to detect tax evasion and identify non-compliant businesses more efficiently. This includes leveraging data from various sources, such as corporate filings, transaction records, and property ownership databases.

The LASG aims to create a more transparent and accountable tax system, ultimately fostering sustainable economic growth and development within Lagos State. Businesses are strongly advised to proactively verify their tax status and address any outstanding liabilities to avoid the disruption of account freezes and potential penalties.