Amid reports that one of the two Binance executives, Nadeem Anjarwalla, detained by the Economic and Financial Crimes Commission (EFCC) for alleged tax evasion and other offences in Nigeria has escaped from custody, the Federal Government has proceeded to file criminal charges against them.
Media reports said the 38-year-old Briton, who also possesses a Kenyan citizenship, escaped from the custody of the antigraft agency on Friday, March 22, after operatives escorted him to a nearby mosque for prayers in the spirit of Ramadan.
His whereabouts remain unknown, although security operatives have been given firm directives to comb everywhere and get him back into custody.
Anjarwalla, who is Binance’s Africa regional manager, was arrested and detained along with Tigran Gambaryan, a US citizen, in charge of financial crime compliance at the crypto exchange platform, shortly on their arrival in Nigeria on February 26, 2024.
The Special Adviser on Media to the FIRS Chairman, Dare Adekanmbi, said on Sunday a four-count criminal charge was filed against the two executives before a Magistrate Court in Abuja.
On February 28, 2024, Adekanmbi said the court granted the anti-graft agency an order to remand the duo for 14 days in its custody.
The court also ordered Binance to make available to the Nigerian government all the data/information of Nigerians trading on its platform.
Following Binance’s refusal to comply with the order, the court extended the remand of the two officials for an additional 14 days to prevent them from tampering with evidence, while the case was adjourned till April 4, 2024.
However, on Friday, March 22, the Federal government approached the Federal High Court in Abuja to file lawsuit No. FHC/ABJ/CR/115/2024 for a four-count charge against Binance Holdings Limited, Anjarwalla and Gambaryan for tax evasion.
Details of the charge against Binance include non-payment of Value-Added Tax (VAT), 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.
Specifically, the government accused them of offering services to subscribers on their platform without due registration with the Federal Inland Revenue Service (FIRS) to enable them pay all relevant taxes to the government.
By failure to carry out the registration with the FIRS, the crypto trading platform and its officials were found liable for an offence, contrary to and punishable under Section 8 of the Value Added Tax Act of 1993 (as Amended).
The defendants were also accused of offering taxable services to subscribers on their trading platform while failing to issue invoices to those subscribers to determine the value-added taxes they should pay, by so doing, committed an offence contrary to and punishable under S.29 of the Value Added Tax Act of 1993 (as amended).
Adekanmbi said the decision to charge the platform and its officials to court was to uphold fiscal responsibility and safeguard the economic integrity of 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.
He said the Federal Government remains resolute in its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector.
By the provision of its establishment law and various others, the FIRS 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 $4.3billion.
