By Milcah Tanimu

March 25, 2024

In a significant development, the Federal Government has initiated legal action against Binance, a leading cryptocurrency exchange platform, for alleged tax evasion.

The Federal Inland Revenue Service (FIRS) filed charges against Binance at the Federal High Court in Abuja, marking a decisive step in upholding fiscal responsibility and safeguarding the economic integrity of the nation.

The suit, identified as FHC/ABJ/CR/115/2024, implicates Binance with four counts of tax evasion, alongside two senior executives, Tigran Gambaryan and Nadeem Anjarwalla, presently in custody of the Economic and Financial Crimes Commission (EFCC).

The charges leveled against Binance encompass non-payment of Value-Added Tax (VAT), Company Income Tax (CIT), failure to submit tax returns, and alleged complicity in enabling 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.

Of particular note is the charge related to Binance’s purported failure to collect and remit various taxes to the federation, as mandated by Section 40 of the FIRS Establishment Act 2007.

Section 40 of the Act outlines penalties, including potential imprisonment, for entities found guilty of non-deduction and non-remittance of taxes, a provision under which Binance faces scrutiny.

The charges provide specific instances where Binance allegedly violated tax laws, such as failing to issue VAT invoices, hindering tax determination and payment by subscribers.

Adekanmbi, a legal expert, highlighted that any company conducting business exceeding N25 million annually falls within Nigeria’s tax purview, necessitating compliance with Company Income Tax (CIT) and Value Added Tax (VAT) regulations.

Given Binance’s failure to adhere to these regulations, it faces potential legal consequences for violating Nigerian laws.

FIRS, empowered by legislation, is entrusted with assessing, collecting, and accounting for revenue accruing to the Federation, as well as administering relevant tax laws.

Notably, Binance previously admitted guilt to breaching anti-money laundering laws in the United States in late 2023, settling through a plea bargain that incurred a $4.3 billion penalty on the company.