In a significant development, the Federal Government has initiated legal proceedings 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).
The suit, bearing number FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion and marks a decisive step by the government to enforce fiscal responsibility and protect the economic integrity of the country.
Named as co-defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, senior executives of Binance who are currently in custody of the Economic and Financial Crimes Commission (EFCC).
The charges leveled against Binance include failure to pay Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and complicity in facilitating tax evasion by its customers through its platform.
Additionally, the Federal Government alleges that Binance failed to register with FIRS for tax purposes and violated existing tax regulations within Nigeria.
One of the charges pertains to Binance’s alleged failure to collect and remit various categories of taxes to the federation, as mandated by Section 40 of the FIRS Establishment Act 2007 as amended.
This section of the Act outlines penalties and potential imprisonment for entities that fail to deduct and remit taxes as required by law.
The charges provide specific instances where Binance purportedly contravened tax laws, including failure to issue invoices for VAT purposes, hindering the determination and payment of taxes by its users.
According to Adekanmbi, any company conducting business exceeding N25 million annually is obligated under the Finance Act to pay taxes such as Company Income Tax (CIT) and Value Added Tax (VAT). Failure to comply constitutes a violation of Nigerian laws, subjecting the company to investigation and potential legal action.
FIRS, empowered by various laws, is responsible for assessing, collecting, and accounting for revenue accruing to the Federation and administering relevant tax laws.
This legal action follows Binance’s admission of guilt regarding violations of anti-money laundering laws in the United States in late 2023, resulting in a plea bargain that imposed a $4.3 billion penalty on the company.
