Tax agency can’t debit accounts without court order – Oyedele

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that Nigerian tax authorities cannot debit taxpayers’ bank accounts without first going through the full judicial process, dismissing claims that the new tax laws allow arbitrary deductions.

Oyedele made the clarification on Wednesday while speaking on the Arise Television Morning Show, amid public controversy over alleged alterations to recently gazetted tax laws and fears that tax officials could access bank accounts without court approval.

He explained that before any deduction can be made from a taxpayer’s bank account, the tax liability must have been conclusively established through the courts.

“Before you get to this power of substitution, that tax liability must be final and conclusive,” he said. “You have to go through that process that involves stages of the courts.”

According to him, the procedure begins with an assessment issued to the taxpayer, followed by a formal objection process. If the disagreement persists, the matter proceeds to the Tax Appeal Tribunal, then to the High Court, the Court of Appeal and, ultimately, the Supreme Court.

“That is when that tax is final and conclusive,” Oyedele said. “That is when the taxman can come to you.”

He clarified that the authority to recover unpaid taxes from bank accounts, commonly referred to as the “power of substitution”, is not new and already exists under Nigeria’s current tax laws. “That power is in the current law that we have,” he said. “It has always been there.”

However, he warned against misrepresenting the provision in a way that could create unnecessary panic in the banking system.

“I know the headline tomorrow will now be that I said they can take money from a bank account,” Oyedele said. “We’re careful not to have a run on banks.”

He added that while it is legally possible for tax authorities to recover funds from bank accounts, it can only happen after an “elaborate process” backed by court decisions, stressing that such measures are typically reserved for serious cases.

Oyedele also rejected claims that the gazetted tax laws were fake or had been secretly altered to strip courts of their powers, saying many of the circulating allegations were not backed by any official investigation.

“I don’t think it would be productive to start discussing alleged alterations that we don’t even know where they came from,” he said, adding that some of the provisions being circulated did not exist in the gazetted laws.

He further noted that some sections being cited as controversial, including claims that taxpayers must pay a deposit before filing an appeal, were not contained in the Nigeria Tax Administration Act as quoted by critics.

While acknowledging concerns about public trust, Oyedele said the absence of an officially published harmonised version of the bills passed by the National Assembly had contributed to confusion.

“If the harmonised version had been published, we wouldn’t even be having some of these allegations,” he said.

Despite calls in some quarters for the suspension of the new tax laws, Oyedele said such a move would be impractical, noting that parts of the reforms had already taken effect, including the establishment of the Nigeria Revenue Service. “In tax matters, if you come in the way of revenue generation, even for one month, that’s a crisis,” he said.

He urged Nigerians to read the tax laws in full rather than isolating individual provisions, warning that selective interpretation had fuelled unnecessary fear.(Punch)