Nigerian Government Sues Binance for Alleged Tax Evasion

The Nigerian government has taken a significant step towards what it calls "upholding fiscal responsibility" by filing a lawsuit against Binance, a major cryptocurrency exchange platform. The Federal Inland Revenue Service (FIRS) announced the legal action on Monday, March 25th, 2024, in the Federal High Court, Abuja.

The lawsuit, designated FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion.

The crypto company is joined by two senior executives, Tigran Gambaryan and Nadeem Anjarwalla, who are currently under arrest by the Economic and Financial Crimes Commission (EFCC), as the second and third defendants in the suit.

The specific charges against Binance include:

• Non-payment of Value-Added Tax (VAT)
• Company Income Tax evasion
• Failure to file tax returns
• Aiding customers in evading taxes through its platform

The Nigerian government further accuses Binance of failing to register with FIRS and operating in violation of existing tax regulations.

One specific count highlights the alleged failure to comply with Section 40 of the FIRS Establishment Act 2007 (as amended), which addresses the non-payment and non-remittance of taxes.

This section prescribes penalties and potential imprisonment for non-compliance.

The lawsuit details instances where Binance allegedly violated tax laws, such as not issuing invoices for VAT purposes, making it difficult for users to determine and pay taxes.

"The Finance Act deems any company exceeding N25 million annually present in Nigeria," stated the FIRS in a press release. "

This includes Binance. They are obligated to pay Company Income Tax (CIT) and collect and remit Value Added Tax (VAT). Their failure to adhere to these requirements is a violation of Nigerian law."

The Nigerian government maintains its commitment to enforcing tax regulations and combating financial impropriety within the cryptocurrency sector.

This lawsuit follows Binance's guilty plea to anti-money laundering violations in the United States in late 2023, resulting in a $4.3 billion fine.