The Federal Government on Monday 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.
This is even as one of the two Binance executives detained in Nigeria for alleged tax evasion and other offences, Nadeem Anjarwalla, has reportedly escaped from custody.
In the suit with number: FHC/ABJ/CR/115/2024, FIRS implicated Binance with four tax evasion accusations 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 levied 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 within 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 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 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).
“But Binance did not do this properly. So, the company broke Nigerian laws and could be investigated and taken to court for this infraction,” Adekanmbi said.
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.
Binance pleaded guilty to flouting anti-money laundering laws in the United States in late 2023, settling for a plea bargain that cost the company $ 4.3 billion.
Executive escapes from custody
Meanwhile, one of the two Binance executives detained in Nigeria for alleged tax evasion and other offences, Nadeem Anjarwalla, has reportedly escaped from custody.
In February, the Federal Government detained the two senior executives of Binance.
The arrest came amidst efforts by the government to rein in speculations on the naira by cracking down on cryptocurrency exchanges.
The charges 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.
Anjarwalla, on Friday, reportedly escaped from the Abuja guest house where he and his colleague were being held, Premium Times reports.
He was said to have escaped after some guards on duty escorted him to a nearby mosque for prayers.
The British national, who also holds Kenyan citizenship, is suspected to have departed Abuja via a Middle East airline.
How Anjarwalla boarded an international flight despite his British passport, which he used to enter Nigeria, being held by Nigerian authorities remains unclear.
Premium Times reports that authorities are also working to unravel his intended destination to get him back into custody.
An Immigration official said the Binance executive fled Nigeria on a Kenyan passport.
The official disclosed that the authorities are working on unravelling how he obtained the passport, given the fact that he had no other travel document (apart from the British passport) on him when he was arrested.
According to another insider, the two officials were detained in a “pleasant guest house” and granted numerous privileges, such as access to telephones. Anjarwalla is suspected to have taken advantage of this opportunity to plan his escape.
The Head of Strategic Communication at the Office of the National Security Adviser, Zakari Mijinyawa, could not confirm the incident when contacted on Sunday night.
Mijinyawa promised to enquire and revert. However, he has yet to do so as of the time of filing this report.
