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FG files tax evasion charges against Binance
In an assertive move to promote financial accountability and protect the economic well-being of the nation, the Federal Government has initiated legal proceedings against Binance, a leading cryptocurrency exchange platform.
The charges, formally submitted at the Federal High Court in Abuja, were disclosed on Monday by the Federal Inland Revenue Service (FIRS).
Bearing the suit number FHC/ABJ/CR/115/2024, the lawsuit accuses Binance of evading taxes on four counts.
Accompanying the crypto giant as the second and third defendants in the legal action are Tigran Gambaryan and Nadeem Anjarwalla, high-ranking officials of Binance currently detained by the Economic and Financial Crimes Commission (EFCC).
Among the charges leveled against Binance are accusations of non-compliance with Value-Added Tax (VAT) regulations, Company Income Tax obligations, failure to submit tax returns, and alleged complicity in facilitating tax evasion by customers using its platform.
Moreover, the Federal Government asserts that Binance failed to properly register with FIRS for tax purposes and breached existing tax laws within the nation.
READ ALSO: Court orders Binance to release data to EFCC regarding terrorism financing allegation
One of the counts in the lawsuit is related to Binance’s alleged failure to collect and remit various taxes to the federation, as mandated by Section 40 of the FIRS Establishment Act 2007, as amended.
This section addresses failure to deduct and remit taxes, outlining penalties and possible imprisonment for entities found in violation.
The charges highlight specific situations where Binance purportedly contravened tax regulations, such as omitting invoices for VAT transactions, thereby hindering the accurate calculation and payment of taxes by users.
“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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