FIRS Initiates Legal Battle Against Binance Over Alleged Tax Evasion in Nigeria
Nigeria’s Federal Inland Revenue Service (FIRS), the nation’s principal tax authority, has officially commenced the trial of Binance, the global cryptocurrency exchange, in a high-stakes case alleging tax evasion. This development marks a significant turn in the ongoing regulatory scrutiny of cryptocurrency operations within the African tech landscape, particularly in Nigeria, a major player in digital asset adoption.
The Charges: Unremitted VAT and Company Income Tax
The current legal proceedings follow a strategic pivot by the FIRS. Previously, the tax agency had filed charges against two senior Binance executives, Tigran Gambaryan and Nadeem Anjarwalla (who reportedly absconded from custody), for similar allegations. However, the FIRS subsequently withdrew those individual charges and initiated a fresh lawsuit, naming Binance itself as the sole defendant. The amended lawsuit explicitly accuses Binance of failing to collect and remit various tax categories to the Nigerian federation. Specifically, the charges highlight a purported breach of Section 40 of the FIRS Establishment Act 2007 (as amended), citing the alleged failure to deduct and remit Value Added Tax (VAT) and Company Income Tax (CIT). According to the FIRS, Binance offered extensive cryptocurrency services to Nigerian users, including facilitating transactions, remittances, and asset transfers, without fulfilling its obligation to deduct the necessary VAT from these operations. This legal action underscores Nigeria’s increasing efforts to bring digital economy participants under its tax net. In a related development, Binance had previously informed the FIRS of its appointment of a Nigerian representative, identified as Ayo, indicating its engagement with the local regulatory framework.
This trial is poised to set a crucial precedent for how international cryptocurrency platforms operate and fulfill their tax obligations within Nigeria. The outcome will undoubtedly influence future regulatory approaches to digital assets not just in Nigeria, but potentially across the wider African continent, as governments seek to balance innovation with financial oversight and revenue generation.
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