The federal government has charged Binance, a popular cryptocurrency platform, with “tax evasion”.
The Federal Inland Revenue Service (FIRS) filed the charge before the Federal High Court in Abuja on March 25, according to a statement released on Monday.
The FIRS stated that the move is intended to maintain fiscal responsibility while also protecting the country’s economic integrity.
Suit number FHC/ABJ/CR/115/2024 “implicates Binance with a four-count tax evasion accusation.”
The statement reads:
“Joined with the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently under the custody of the Economic and Financial Crimes Commission (EFCC).”
The FIRS charged Binance with non-payment of value-added tax (VAT), company income tax, failure to file tax returns, and complicity in assisting customers to evade taxes through its platform.
Furthermore, in the lawsuit, the federal government accused Binance of failing to register with the FIRS for tax purposes and violating existing tax regulations in the country.
“One of the counts in the lawsuit pertains to Binance’s alleged failure to collect and remit various categories of taxes to the federation as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended.”
“Section 40 of the Act explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.”
The FIRS also detailed specific instances in which Binance allegedly violated tax laws, such as failing to issue VAT invoices and obstructing subscribers’ ability to calculate and pay taxes.
Citing the Act, the tax body stated that “any company that transacts business over N25 million annually is deemed to be present in Nigeria” by the Finance Act.
The statement further reads:
“According to this rule, Binance falls into that category. So, it has to pay taxes like Company Income Tax (CIT) and also collect and pay Value Added Tax (VAT).”
“But Binance did not do this properly. So, the company broke Nigerian laws and could be investigated and taken to court for this infraction.”
The agency stated that it remains committed to ensuring tax compliance and combating financial impropriety in the cryptocurrency sector.
The federal government recently accused the cryptocurrency platform of manipulating foreign exchange (FX) rates, prompting a ban on crypto trading platforms.
On February 28, two of Binance’s top executives, Nadeem Anjarwalla, a 37-year-old British-Kenyan and Binance’s regional manager for Africa, and Tigran Gambaryan, a 39-year-old US citizen and Binance’s head of financial crime compliance, were detained by Nigerian authorities for weeks.
Subsequently, a federal high court in Abuja ordered Binance Holdings Limited to provide the Economic and Financial Crimes Commission (EFCC) with comprehensive data or information on all Nigerian traders on its platform.