The Federal Government has initiated legal proceedings against Binance, a leading cryptocurrency exchange platform, in a move to enforce tax compliance and bolster fiscal responsibility. Announced by the Federal Inland Revenue Service (FIRS) on Monday, the charges were formally filed at the Federal High Court in Abuja, accusing Binance of four counts of tax evasion.
Accompanying Binance as defendants in the lawsuit are senior executives Tigran Gambaryan and Nadeem Anjarwalla, currently detained by the Economic and Financial Crimes Commission (EFCC).
The allegations against Binance include failure to remit Value-Added Tax (VAT), Company Income Tax, and the facilitation of tax evasion by its customers through the platform. Additionally, Binance is accused of neglecting to register with FIRS for tax purposes and violating existing tax regulations in Nigeria.
The lawsuit references Section 40 of the FIRS Establishment Act 2007, which mandates the collection and remittance of taxes, prescribing penalties for non-compliance.
FIRS pointed out specific instances where Binance allegedly violated tax laws, such as the failure to issue VAT invoices, hindering tax determination by subscribers.
FIRS emphasized that companies conducting business exceeding N25 million annually, like Binance, are obligated to pay taxes such as Company Income Tax (CIT) and collect and remit VAT. Failure to comply could result in legal action.
The Federal Government reaffirmed its commitment to ensuring tax compliance and combatting financial impropriety within the cryptocurrency sector. FIRS is empowered by law to administer relevant tax laws.
This legal action follows Binance's admission of guilt to violating anti-money laundering laws in the United States in late 2023, resulting in a $4.3 billion fine under a plea bargain agreement.
