FG Initiates Legal Action Against Binance for Alleged Tax Evasion

The Federal Government took legal action against Binance, a prominent cryptocurrency exchange platform, for tax evasion, with charges filed at the Federal High Court in Abuja by the Federal Inland Revenue Service.

In the suit bearing number FHC/ABJ/CR/115/2024, FIRS implicated Binance with four tax evasion allegations, portraying it as a decisive move to uphold fiscal responsibility and safeguard the nation’s economic integrity.

Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently in the custody of the Economic and Financial Crimes Commission, are named as second and third defendants in the suit alongside the crypto company.

The charges against Binance include non-payment of Value-Added Tax and Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform.

The Federal Government also accused Binance of failing to register with FIRS for tax purposes and contravening existing tax regulations in the country.

One of the lawsuit’s counts concerns 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 outline specific instances where Binance purportedly violated tax laws, such as failing to issue invoices for VAT purposes, thus impeding the determination and payment of taxes by subscribers.

Adekanmbi, a legal expert, highlighted that the Finance Act obligates any company transacting business exceeding N25 million annually to pay taxes like Company Income Tax (CIT) and collect and pay Value Added Tax (VAT).

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

Binance had pleaded guilty to violating anti-money laundering laws in the US in late 2023, reaching a plea bargain that incurred a $4.3 billion penalty for the company.