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Abuja, Nigeria – The Federal Inland Revenue Service (FIRS) began its tax evasion trial against cryptocurrency exchange Binance on Monday at the Federal High Court in Abuja. Justice Emeka Nwite presided over the case, where FIRS presented its first witness.
The FIRS alleges that Binance failed to collect and remit Value Added Tax (VAT) and Company Income Tax (CIT), violating Section 40 of the FIRS Establishment Act 2007. The charges, amended on May 17, 2024, state that it offered services in Nigeria without meeting its tax obligations.
Mbami Shomgwan, Manager of the TaxPromax Technology Department at FIRS, testified as the first witness. He explained that TaxPromax, the FIRS automated tax system, handles taxpayer registration, tax collection, and accounting. Shomgwan stated, “It is expected that such a taxpayer must be registered on the automated tax system.” He confirmed that companies operating in Nigeria must register to fulfill their tax duties.
During cross-examination by Binance’s lawyer, Chukwuka Ikwuazom (SAN), Shomgwan clarified tax obligations for companies. He said Nigerian companies must register regardless of liability. Non-Nigerian companies with a significant economic presence in Nigeria must also register. He added that foreign companies without significant economic presence in Nigeria do not need to file tax returns or pay taxes.
The court adjourned the trial to April 11, 2025.
This case follows increased scrutiny of Binance’s operations in Nigeria. The government previously accused Binance of impacting foreign exchange (FX) rates. Information Minister Idris Mohammed said it had a turnover exceeding $20 billion in Nigeria in 2023. Two senior Binance executives were detained on February 28, 2024. The Economic and Financial Crimes Commission (EFCC) and FIRS filed separate lawsuits against Binance for alleged tax evasion, money laundering, and FX violations. One executive, Nadeem Anjarwalla, escaped custody. The other, Tigran Gambaryan, was released.
