FG files tax evasion charges against Binance

On Monday, the Federal Government began legal action against Binance, a well-known cryptocurrency exchange, for alleged tax evasion.

The Federal Inland Revenue Service filed the charges at the Federal High Court in Abuja.

The case, numbered FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion, stating this is a critical step to maintain fiscal responsibility and protect the nation’s economic integrity.

Tigran Gambaryan and Nadeem Anjarwalla, senior Binance executives, are also named as defendants in the case and are currently detained by the Economic and Financial Crimes Commission.

Binance faces allegations of failing to pay Value-Added Tax and Company Income Tax, not filing tax returns, and facilitating tax evasion for its customers.

In the suit, the Federal Government also accused Binance of failure 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 alleged 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.

Section 40 of the Act explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.

The charges further detail specific instances where Binance purportedly violated tax laws, such as failing to issue invoices for VAT purposes, thus obstructing the determination and payment of taxes by subscribers.

“Any company that transacts business in excess of N25 million annually is deemed by the Finance Act to be present in Nigeria.

“According to this rule, Binance falls into that category. So, it has to pay taxes like Company Income Tax (CIT) and also collect and pay Value Added Tax (VAT).

“But Binance did not do this properly. So, the company broke Nigerian laws and could be investigated and taken to court for this infraction,” Adekanmbi said.

FIRS, by the law setting it up and various others, is empowered to assess, collect and account for revenue accruing to the Federation and administer relevant tax laws.

Binance pleaded guilty to flouting anti-money laundering laws in the United States in late 2023, settling for a plea bargain that cost the company $ 4.3 billion.