The Federal Inland Revenue Service (FIRS) has initiated legal action against cryptocurrency exchange Binance, alleging multiple instances of tax evasion, as reported in a statement released on Monday, March 25, 2024
The charges include accusations of non-remittance of value added tax (VAT), company income tax (CIT), failure to comply with tax return filing obligations, and purported facilitation of tax evasion for its users.
Additionally, the lawsuit claims that Binance failed to register for tax purposes with the FIRS and violated Nigerian tax laws.
According to FIRS, one of the counts in the legal proceedings relates to Binance’s alleged neglect to collect and remit various categories of taxes to the federation, as stipulated by Section 40 of the FIRS Establishment Act 2007, which carries penalties including potential imprisonment for defaulting entities.
The cryptocurrency exchange has yet to respond to these allegations.
This development follows recent scrutiny from the Nigerian authorities over Binance’s operations, including allegations of influencing foreign exchange rates. The situation escalated when two senior Binance executives, Mr. Nadeem Anjarwalla and Mr. Tigran Gambaryan, were detained by Nigerian authorities on February 28. They were reportedly held for several weeks before reportedly leaving Nigeria.
The Nigerian government’s clampdown on cryptocurrency channels, part of efforts to curb currency speculation, has exacerbated the country’s economic challenges. The naira has experienced significant devaluation, losing 70 percent of its value against the dollar since last year’s foreign exchange reforms, exacerbated by a local dollar shortage.
