FIRS put a 30-day hold on freezing of companies’ bank accounts

The Federal Inland Revenue Service (FIRS) has announced a temporary suspension on plans to freeze bank accounts of tax defaulters.

The service, in a letter sighted by National Daily and signed by Abiodun Aina, coordinating director, Domestic Taxes Group of the FIRS, said “the suspension has become imperative because of the large number of taxpayers visiting our office for reconciliation and as a result creating inconveniences to the tax payers when they have to wait a long while due to the high traffic of visiting tax payers to our office. Kindly treat as urgent.”

It however said that the suspension is for 30 days.

According to the letter dated 15th February 2019 and addressed to managing directors of all Nigerian banks titled, ‘Temporary suspension of lien on customers’ account’ with attention to compliance officers said, “The FIRS wishes to inform you that the lien placed on the accounts of our tax payers with your bank has been suspended for 30 days with immediate effect.”

The FIRS had earlier written to banks to appoint them as collection agents of taxpayers considered to be in default of tax payments. In order to achieve this, the FIRS directed the relevant banks to freeze the accounts of the taxpayers to prevent them from drawing funds from the accounts.

KPMG had said that the letters of substitution issued to the banks breach the confidentiality agreement between banks and their clients.

“Generally, a bank has a fiduciary obligation to maintain the confidentiality of its customers and their transactions and to prevent third-party access to the customers’ account information”. The exceptions to this duty are in cases where the bank is required by law or a court of competent authority to make disclosure, and where the customer consents to the disclosure.