The news:
- Nigeria’s Federal Inland Revenue Service (FIRS) has filed tax evasion charges against global cryptocurrency exchange platform Binance.
- The tax agency, in the suit with number FHC/ABJ/CR/115/2024 filed in Abuja on Monday, March 25, 2024, claimed that the cryptocurrency platform had contravened four tax laws — failure to pay company income tax, non-payment of value added tax (VAT), noncompliance with tax return filing obligations, and complicity in assisting its users evade taxes through its platform.
- The Nigerian government has accused Binance of failing to register with the authorities for tax purposes, flouting existing tax laws in the country.
US citizen Tigran Gambaryan and British-Kenyan Nadeem Anjarwalla, both senior executives of Binance who were detained on February 26, 2024, by the Office of Nigeria's National Security Adviser (ONSA), are joined by the crypto company as second and third defendants in the suit.
However, Anjarwalla, the Regional Manager for Africa for Binance, was said to have escaped custody on Friday, March 22, 2024.
The ONSA, which claimed to be unsure how Anjarwalla managed to slip out of the country as his passport had been seized, disclosed they were seeking collaboration with Interpol to obtain a warrant for his arrest.
The tax evasion charges follow the government’s investigation of the cryptocurrency company’s Nigerian operations over alleged suspicious activities to subvert Nigeria’s currency.
FIRS noted, in an aspect of the document, Binance’s alleged failure to collect and remit various categories of taxes to the Federal Government as mandated by Section 40 of the FIRS Establishment Act 2007 (amended), which addresses the non-deduction and non-remittance of taxes, prescribing penalties and possible jail term for defaulters.
“Any company that transacts business above N25 million annually is deemed by the Finance Act to be present in Nigeria. According to this rule, Binance falls into that category,” the suit noted.
Additionally, the suit highlighted instances where the crypto platform violated multiple tax laws, including failure to issue invoices for VAT purposes, an act the plaintiff said obstructed the determination and payment of taxes by users on the platforms.
Earlier this month, Binance ended all transactions and trading in Nigeria's local currency and said any remaining balances would be automatically converted into tether — a cryptocurrency stablecoin pegged to the U.S. dollar.
On March 5, 2024, Binance announced discontinuing all Nigerian naira services on the platform, as it stopped accepting Naira deposits and withdrawals.
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Soon after, the authorities demanded information about Binance's top 100 users in Nigeria. Following an ex-parte motion, a Federal High Court in Abuja, on February 29, 2024, ordered Binance to provide detailed information about all Nigerians who trade on its cryptocurrency platform to the Economic and Financial Crimes Commission (EFCC).
