The charges leveled 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
The federal government, in a significant move geared towards protection of national economic integrity and fiscal sustainability, filed a lawsuit against well-known cryptocurrency exchange site Binance.
The Federal Inland Revenue Service (FIRS) made the allegations public on Monday after they were formally filed before the Federal High Court in Abuja.
The case, which has the case number FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion.
Accompanying the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently held in custody by the Economic and Financial Crimes Commission (EFCC).
The charges leveled 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.
Furthermore, the Federal Government accuses Binance of neglecting 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 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 explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.
The charges outline specific instances where Binance allegedly violated tax laws, such as the failure to issue invoices for VAT purposes, thereby impeding the determination and payment of taxes by subscribers.
“Any company that conducts business exceeding N25 million annually is deemed, by the Finance Act, to be present in Nigeria,” the FIRS noted in a statement.
“According to this rule, Binance falls into that category. So, it is obligated to pay taxes like Company Income Tax (CIT) and also collect and remit Value Added Tax (VAT). However, Binance did not adhere to these requirements, thus violating Nigerian laws and potentially facing investigation and legal action for this infraction.”
The Federal Government says it remains steadfast in its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector.
By law, FIRS is empowered to assess, collect, and account for revenue accruing to the Federation and administer relevant tax laws.
Binance previously pleaded guilty to violating anti-money laundering laws in the United States in late 2023, reaching a plea bargain agreement that resulted in the company paying a hefty fine of $4.3 billion.
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