FG Takes Legal Action Against Binance for Alleged Tax Evasion

THE FEDERAL Government has initiated legal proceedings against Binance, a prominent cryptocurrency exchange platform, over allegation of tax evasion. The charged were officially filed at the Federal High Court in Abuja by the Federal Inland Revenue Service (FIRS) in a bid to uphold fiscal responsibility and safeguard Nigeria’s economic integrity.

In the suit numbered FHC/ABJ/CR/115/2024, FIRS has implicated Binance with four counts of tax evasion.

The lawsuit also included senior executives of Binance, Tigran Gambaryan and Nadeem Anjarwalla, who are currently under the custody of the Economic and Financial Crimes Commission (EFCC).

The charges against Binance span various aspects of tax compliance including non-payment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and allegedly aiding customers in evading taxes through its platform.

The FG accused Binance of failing to register with FIRS for tax purposes and violating existing tax regulations within Nigeria. Notable, one of the counts in the lawsuit revolves around 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 addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities. The charges further specify instances where Binance purportedly violated tax laws, such as the failure to issue invoices for VAT purposes, hindering the determination and payment of taxes by subscribers.

In response to these allegations, FIRS emphasized that any company conducting business exceeding N25million annually is obligated to pay taxes, including Company Income Tax (CIT) and Value Added Tax (VAT). Failure to comply with these tax obligations constitutes a violation of Nigerian laws, subjecting the company to investigation and potential legal action.

The FIRS, empowered by law to assess, collect, and account for revenue accruing to the Federation and administer relevant tax laws, underscored the importance of enforcing tax compliance across all sectors of the economy.

Binance, which previously pleaded guilty to violating anti-money laundering laws in the United States in late 2023, settled for a plea bargain costing the company $4.3billion.

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