The Federal Government of Nigeria has initiated legal proceedings against Binance, a major cryptocurrency exchange platform, for alleged tax evasion.
The charges, formally filed at the Federal High Court in Abuja, were announced on Monday by the Federal Inland Revenue Service (FIRS).
In a lawsuit designated as suit number FHC/ABJ/CR/115/2024, Binance is accused of four counts of tax evasion.
Joining the crypto company as second and third defendants are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently in custody with the Economic and Financial Crimes Commission (EFCC).
The charges against Binance include allegations of 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 Nigeria.
One of the counts in the lawsuit pertains to Binance’s purported 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. This section outlines penalties and potential imprisonment for entities found guilty of non-deduction and non-remittance of taxes.
The charges detail specific instances where Binance allegedly violated tax laws, such as the failure to issue invoices for VAT purposes, hindering the determination and payment of taxes by subscribers.
FIRS emphasized that any company conducting business exceeding N25 million annually is obligated to pay taxes like Company Income Tax (CIT) and collect and remit Value Added Tax (VAT). Failure to comply constitutes a violation of Nigerian laws and may lead to investigation and legal action.
The Federal Government asserts its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector. FIRS is empowered by law to assess, collect, and account for revenue accruing to the Federation and administer relevant tax laws.
Binance had previously pleaded guilty to violating anti-money laundering laws in the United States in late 2023, resulting in a plea bargain agreement that saw the company pay a hefty fine of $4.3 billion.
