The government of Nigeria has taken decisive action against Binance, a prominent cryptocurrency exchange platform over tax evasion.
The charges, filed at the Federal High Court in Abuja, were announced on Monday by the Federal Inland Revenue Service (FIRS) in a statement issued by the media aide to FIRS chairman, Dare Adekanmbi.
The lawsuit, marked FHC/ABJ/CR/115/2024, accuses Binance of four-count tax evasion charges. Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance, are joined as second and third defendants in the suit. The charges against Binance include non-payment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform. Additionally, the Federal Government accuses Binance of failing to register with FIRS for tax purposes and contravening existing tax regulations within 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 charges further detail specific instances where Binance allegedly violated tax laws, such as failing to issue invoices for VAT purposes, obstructing the determination and payment of taxes by subscribers.
The Finance Act stipulates that any company transacting business in excess of N25 million annually is deemed to be present in Nigeria and must pay taxes like Company Income Tax (CIT) and collect and pay Value Added Tax (VAT). However, Binance purportedly failed to adhere to these regulations, resulting in the alleged infractions.
“The federal government remains resolute in its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector,” the statement read in part.
It is noteworthy that Binance pleaded guilty to flouting anti-money laundering laws in the United States in late 2023, settling for a plea bargain that cost the company $4.3 billion.
The legal proceedings against Binance signify the government’s determination to enforce tax laws rigorously and hold corporations accountable for their financial obligations. As the case unfolds, stakeholders await the outcome of the trial, which could have far-reaching implications for the cryptocurrency industry in Nigeria and beyond.
