The Federal Government of Nigeria has taken legal action against Binance, a leading cryptocurrency exchange platform, for alleged tax evasion. The charges were formally filed at the Federal High Court in Abuja by the Federal Inland Revenue Service (FIRS) on Monday.
In the suit marked FHC/ABJ/CR/115/2024, FIRS leveled four tax evasion accusations against Binance, characterizing the move as a crucial step to ensure fiscal accountability and uphold the economic integrity of the nation. The government also named Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance, as co-defendants in the case. Notably, Gambaryan and Anjarwalla are currently in the custody of the Economic and Financial Crimes Commission (EFCC).
The charges against Binance include failure to pay Value-Added Tax (VAT) and Company Income Tax, neglecting to file tax returns, and allegedly facilitating tax evasion among its customers through its platform. Additionally, the government accused Binance of failing to register with FIRS for tax purposes and violating existing tax regulations within Nigeria.
One of the counts in the lawsuit specifically addresses Binance’s alleged failure to collect and remit various categories of taxes to the federal government, as mandated by Section 40 of the FIRS Establishment Act 2007. This section outlines penalties, including potential imprisonment, for entities that fail to deduct and remit taxes as required by law.
The charges provide detailed instances where Binance purportedly breached tax laws, such as not issuing invoices for VAT purposes, which hindered the determination and payment of taxes by its users.
Explaining the legal basis for the action, tax experts emphasized that any company conducting business in Nigeria exceeding N25 million annually is obligated to pay taxes, including Company Income Tax and Value Added Tax. Binance’s alleged non-compliance with these regulations led to the government’s decision to investigate and pursue legal action.
FIRS, mandated to assess, collect, and account for revenue accruing to the Federation and administer relevant tax laws, has taken proactive measures to address alleged violations by Binance.
This legal action follows Binance’s admission of guilt regarding violations of anti-money laundering laws in the United States in late 2023, where the company settled for a plea bargain costing $4.3 billion.
