Government Lacks Powers to Access Bank Deposits Without Judicial Approval Under New Tax Regime

The Federal Government does not have the authority to access or seize funds in Nigerians’ bank accounts without obtaining a court order under the newly enacted tax laws, according to Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee. Reports by Punch and other Nigerian news outlets indicate that the clarification was made in response to growing public concerns and misinformation surrounding the scope of the recent tax reforms.

Oyedele explained that the new tax laws are designed to improve efficiency in tax administration, enhance compliance, and expand the revenue base, rather than grant unchecked powers to tax authorities to intrude into citizens’ personal finances. He stressed that any action involving the recovery of tax liabilities from bank accounts must follow due legal process and be authorised by a competent court of law.

According to reports, the clarification followed widespread speculation that the reforms would allow government agencies to arbitrarily freeze or withdraw funds from individual and corporate accounts. Oyedele described such claims as misleading, noting that the reforms are anchored on constitutional principles that protect property rights and ensure the rule of law.

He stated that under the new framework, tax authorities are required to establish a valid tax liability, notify the affected taxpayer, and provide an opportunity for objections or resolution before seeking enforcement action. Only after these steps, he said, can the government approach the courts to request permission to recover outstanding taxes from bank accounts.

Oyedele emphasised that the reforms seek to balance revenue mobilisation with the protection of taxpayers’ rights. He noted that trust in the tax system is critical to voluntary compliance and that heavy-handed measures would undermine confidence and discourage participation in the formal economy. As such, the laws were deliberately structured to include safeguards against abuse.

Reports indicate that the new tax laws aim to modernise Nigeria’s tax administration by leveraging technology, streamlining processes, and reducing multiple taxation. Oyedele said the reforms are intended to make it easier for individuals and businesses to understand their obligations and comply without unnecessary friction.

He also pointed out that similar legal safeguards exist in many jurisdictions where tax authorities can only access bank accounts after obtaining court approval. This, he said, ensures transparency and accountability while preventing arbitrary actions by government agencies.

The chairman further explained that the reforms focus more on data sharing, improved record-keeping, and risk-based audits rather than coercive enforcement. By using technology and data analytics, tax authorities can better identify non-compliance and engage taxpayers constructively before resorting to legal measures.

Oyedele added that the reforms also seek to reduce the burden on compliant taxpayers by closing loopholes exploited by tax evaders. He argued that broadening the tax net and improving compliance would ultimately reduce pressure on a small group of taxpayers who currently bear a disproportionate share of the tax burden.

Economic analysts welcomed the clarification, noting that uncertainty around the tax reforms had raised concerns among investors and the general public. They said clear communication is essential to avoid misinterpretation and maintain confidence in the financial system. Analysts stressed that fears of arbitrary access to bank accounts could have undermined trust in banks and discouraged savings.

Business groups also reacted positively to the assurance, saying it reinforces the importance of due process in tax enforcement. They urged the government to continue engaging stakeholders to explain the reforms and address legitimate concerns from businesses and individuals.

Reports noted that Nigeria’s tax-to-GDP ratio remains one of the lowest globally, prompting the government to pursue reforms aimed at boosting non-oil revenue. However, stakeholders have repeatedly emphasised that revenue mobilisation efforts must be accompanied by transparency, fairness, and respect for the rule of law.

Oyedele reiterated that the success of the tax reforms depends largely on public understanding and cooperation. He encouraged Nigerians to seek accurate information from credible sources and avoid spreading unverified claims that could cause unnecessary anxiety.

He also highlighted the importance of dispute resolution mechanisms within the tax system, noting that taxpayers who disagree with assessments have the right to challenge them through established administrative and judicial channels. This, he said, is a core element of a fair and credible tax regime.

The clarification comes amid broader fiscal reforms aimed at strengthening public finances and reducing dependence on borrowing. By improving tax administration and compliance, the government hopes to create a more sustainable revenue base to fund public services and infrastructure.

In conclusion, Oyedele’s remarks underline that the new tax laws do not grant the government unchecked access to bank accounts. Any recovery of tax liabilities, he stressed, must follow due process and be backed by a court order, reaffirming the administration’s commitment to protecting citizens’ rights while pursuing much-needed fiscal reforms.