You Can’t Freeze Bank Accounts of Tax Defaulters, LCCI Tells FIRS

The Lagos Chamber of Commerce and Industry (LCCI) has described the decision of the Federal Inland Revenue Service (FIRS) to freeze accounts of taxpayers, considered to be in default of tax payment, as an act of intimidation.

FIRS had written to select banks as collecting agents with a mandate to subsequently freeze the accounts of defaulters. Such accounts will be debited to the tune of the alleged tax debt.

Reacting to this development, the LCCI, through its Director General, Muda Yusuf, told THISDAY that tax administration should be in consonance with the basic tenets of the rule of law and the fundamental principles of a good tax system.

It added that tax administration should be consistent with the basic principles of equity, fairness, legality and accountability. According to Yusuf, “The LCCI is concerned about the recent turn of events, especially the freezing of accounts of bank customers based on tax assessments that are in dispute.

“This provision is draconian and could be used as a tool of intimidation, coercion and harassment of taxpayers. It should be invoked with utmost discretion and caution.”

The Chamber raised a number of key concerns which included, “Whether the claim of tax liability by the FIRS of the affected investors applies to a final and conclusive assessment which should be an outcome of an exhaustive engagement between the tax authorities and the taxpayer. “The propriety of appointing banks as ‘collecting agents’ by the FIRS, given the strategic and catalytic role of the banking system in business operations, financial intermediation and transactions among economic players is also an area of concern.

“The legality of freezing the accounts of bank customers by the banks on the directive of FIRS for alleged tax liability, given the contractual relationship between the banks and their customers is quite unfair and unacceptable.