The Federal Inland Revenue Service (FIRS) began the trial of Binance, a cryptocurrency exchange platform, on Monday over an alleged tax evasion case.
FIRS presented its first witness, Mbami Shomgwan, Manager of the TaxPromax Technology Department, to the Federal High Court in Abuja.
Tax Evasion Allegations
The FIRS amended its lawsuit on May 17, 2024, accusing Binance of failing to collect and remit Value Added Tax (VAT) and Company Income Tax (CIT) to the federation.
The tax evasion charges follow an official claim that Binance violated Section 40 of the FIRS Establishment Act 2007.
The FIRS contends that Binance’s operations in Nigeria triggered VAT obligations that were not met.
Witness Testimony
During the court session, Shomgwan explained how FIRS’s TaxPromax system manages taxpayer registration, tax collection, and accounting.
He emphasized that any entity conducting business in Nigeria is expected to register on the platform and fulfill tax obligations.
The system, launched in June 2021, records all taxpayer transactions, which the FIRS claims supports their allegations of tax evasion by Binance.
Binance’s Defense
In cross-examination, Binance’s lawyer, Chukwuka Ikwuazom, questioned Shomgwan about the need for foreign companies to register in Nigeria.
The witness clarified that non-Nigerian companies must register if they have significant economic presence in Nigeria.
Court Adjournment and Future Proceedings
Binance’s legal team denied the tax evasion charges, which now form the basis for ongoing litigation.
Background on Binance’s Legal Troubles
The Nigerian government has placed Binance under scrutiny for its impact on the local economy.
In February 2024, authorities detained two senior Binance executives, accusing them of money laundering and foreign exchange violations.
The EFCC and FIRS have separately sued the company, which has denied all charges.
The case against Binance continues to unfold as Nigerian authorities pursue legal action to regulate cryptocurrency platforms more rigorously.
