Nigeria government initiates tax evasion charges against Binance at Abuja High Court; detained executive escapes from custody
The Federal Government has initiated proceedings against Binance, a prominent cryptocurrency exchange platform over tax evasion.
The charges were filed at the Federal High Court in Abuja by the Federal Inland Revenue Service.
In the suit number: FHC/ABJ/CR/115/2024, FIRS four tax evasion accusations against Binance adding that it was a decisive move aimed at upholding fiscal responsibility and safeguarding the economic integrity of the country.
Joined with the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently under the custody of the Economic and Financial Crimes Commission.
The charges leveled against Binance include non-payment of Value-Added Tax, Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform.
In the suit, the Federal Government also accused Binance of failure to register with FIRS for tax purposes and contravening existing tax regulations in 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 in 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).
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.
The Nigerian government alleges that over $21.6 billion in transactions on Binance involved individuals whose identities were shielded, pointing to potential illicit activities such as money laundering, terrorist financing, and market manipulation.
These activities, according to Nigerian authorities, have had adverse effects on the nation’s economy, contributing to currency fluctuations and undermining the value of the Naira.
Meanwhile, Nadeem Anjarwalla, one of the executives from Binance detained in Nigeria has reportedly escape from custody.
Anjarwalla, aged 38, allegedly fled from the Abuja guest house where he and his colleague were being held, purportedly taking advantage of a moment during Ramadan prayers when guards escorted him.
Despite his British passport remaining under the control of Nigerian authorities, he is believed to have exited the country using a Kenyan passport, Premium Times reported.
Authorities are currently working diligently to determine his intended destination and take steps to apprehend him.
The detention of Anjarwalla and his colleague, Tigran Gambaryan, unfolded after their arrival in Nigeria on February 26, 2024.
They were promptly subjected to criminal charges, including alleged tax-related offenses, leading to their remand by a local court.
Recall in United States, Binance had pleaded guilty to flouting anti-money laundering laws in late 2023 and settled for a plea bargain that cost the company $4.3billion.
