The Federal Inland Revenue Service (FIRS) has began the trial of cryptocurrency exchange platform, Binance, in the alleged tax evasion case filed by the tax agency.
The trial comes amid explosive counter-accusation by the Binance employee, Tigran Gambaryan, who claims that Nigerian lawmakers demanded a staggering $150 million bribe in cryptocurrency to prevent his arrest and prosecution.
🇳🇬REGULATION | @binance Fallout with the Nigerian Government Continues to Unfold Amidst Bribery Accusations
Beyond the bribery scandal, Binance Head of Financial Crime Compliance, @TigranGambaryan, refuted other claims by @cenbank
See details below:https://t.co/bah5C6YItd pic.twitter.com/xMi9LtKABD
— BitKE (@BitcoinKE) February 15, 2025
The Nigerian government reportedly filed a lawsuit against Binance demanding $79.5 billion in compensation for “economic losses” and $2 billion in unpaid taxes.
The case, submitted to the Federal High Court in Abuja, Nigeria, alleges that the cryptocurrency exchange operated in Nigeria without a license and failed to adhere to tax regulations.
🇳🇬REGULATION | Nigeria Sues #Binance for $81.5 Billion in Economic Losses and Unpaid Taxes
The Federal Inland Revenue Service (FIRS) claims that Binance has a ‘significant economic presence’ in Nigeria.https://t.co/1VQGMEuClQ @FIRSNigeria @binance @BinanceAfrica pic.twitter.com/VaSjVCjnlu
— BitKE (@BitcoinKE) February 20, 2025
According to local reports, FIRS presented its first witness, Mbami Shomgwan, Manager of the TaxPromax Technology Department at FIRS, before Justice Emeka Nwite of the Federal High Court in Abuja.
In May 2024, at the early stages of its lawsuit, FIRS alleged that Binance failed to collect and remit various categories of taxes to the federation, particularly:
- The Value Added Tax (VAT) and
- Company Income Tax (CIT)
as stipulated by Section 40 of the FIRS Establishment Act 2007, as amended.
In the charge, Binance was accused of providing services – including cryptocurrency trading, remittance, and asset transfers – to Nigerians without deducting the required Value Added Tax (VAT) from its operations.
Amid the case, the court discharged Binance employees, Tigran Gambaryan, and Nadeem Anjarwalla, from the FIRS tax evasion case against Binance on June 14 2024. This decision followed Binance’s notice of appointing a Nigerian representative, Ayodele Omotilewa.
🇳🇬REGULATION | #Nigeria Government Withdraws ML Case Against #Binance Officer But Company Tax Evasion Charges Remain
The money laundering case against @binance would proceed without Gambaryan as he seeks medical attention abroad. https://t.co/ruB4BoZkrK #Tigran pic.twitter.com/39b3pIHirH
— BitKE (@BitcoinKE) October 23, 2024
In court, Binance’s representative denied the tax evasion allegations, allowing the trial to proceed.
At the resumed proceedings, the witness, led in evidence by FIRS lawyer, Moses Idehu, informed the court that the FIRS automated tax system, known as TaxPromax, is an electronic application managing key functions such as taxpayer registration, tax collection, and accounting.
The witness emphasized that the TaxPromax system maintains records of all transactions conducted by taxpayers, lending support to the FIRS’s allegations of tax evasion by Binance. He added that taxpayers can access the application from anywhere in the world, allowing them to fulfill their Nigerian tax obligations remotely.
“If one is not registered on the platform, such a person or institution will not be able to meet their tax obligations, which include filing tax returns, tax assessment, and payment of taxes,” he said.
Under cross-examination by Binance’s lawyer, the witness reaffirmed that any entity with a ‘significant economic presence’ in Nigeria, whether directly or indirectly, is required to register for tax purposes in the country.
“If you are not liable to pay tax in Nigeria, do you have an obligation to register?” the senior lawyer asked.
“No. However, there are two types of taxpayers in Nigeria: Nigerian companies and non-Nigerian companies. All Nigerian companies are expected to register whether they are liable or not. However, non-Nigerian companies must register as long as they have significant economic presence in Nigeria.”
The witness further clarified that a non-Nigerian company without a significant economic presence in Nigeria is not obligated to file tax returns, subscribe for tax assessment, or make tax payments.
Following his testimony, the court adjourned the trial to April 11 2025.
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