The Federal Inland Revenue Service (FIRS), in litigation, coded FHC/ABJ/CS/1444/2024, is seeking a sum of $2.001 billion in income taxes for the fiscal years 2022 and 2023.
The Federal Government of Nigeria has initiated legal proceedings against Binance Holdings Limited, a cryptocurrency exchange, demanding $79.51 billion and ₦231 million as compensation for purported economic losses attributable to its operations within the country.
The FIRS’s lawsuit is one of three currently filed against Binance before the Federal High Court in Abuja. Furthermore, both the FIRS and the Economic and Financial Crimes Commission (EFCC) have charged the firm with tax evasion, money laundering, and violations of foreign exchange regulations under the jurisdiction of Justice Emeka Nwite.
The allegations presented in the lawsuit include penalties for non-compliance with tax obligations, interest calculated based on the Central Bank of Nigeria’s lending rate, alongside other financial sanctions. The FIRS contends that Binance has obscured its business operations despite maintaining a robust economic footprint in Nigeria.
The Nigerian government accuses Binance of infringing upon several legal frameworks, including the Companies Income Tax Act, the FIRS Establishment Act of 2007, the Central Bank of Nigeria's Regulatory Framework for Mobile Money Services, and the CIT Significant Economic Presence Order. The latter mandates that foreign entities generating a minimum of ₦25 million annually from digital services rendered in Nigeria are liable for taxation.
An affidavit submitted by Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, asserts that Binance has been conducting business in Nigeria for over six years without the necessary registration. It was revealed that in a 2024 meeting with the Securities and Exchange Commission, executives from Binance acknowledged the existence of 386,256 active users in Nigeria, with a trading volume of $21.6 billion and net revenue of $35.4 million for 2023.
The affidavit further implicates Binance in operating without essential licenses, contravening the Money Laundering Act, offering unauthorized financial services, and providing currency speculation services. The National Security Adviser has claimed that Binance unlawfully facilitated trading in the Nigerian Naira on its platform, despite assertions of having delisted the currency following prior investigations. Additionally, it is noted that Binance failed to comply with a Federal High Court order for the disclosure of six years’ worth of business records to the FIRS through the EFCC.
During the hearing held on February 11, 2025, before Justice Inyang Ekwo, representatives of Binance did not appear, whereas the FIRS was duly represented by lead counsel Kanu Agabi. Mr. Agabi informed the court of unsuccessful attempts to serve Binance with the legal documents, which led him to file a motion for substituted service. Justice Ekwo granted this motion, directing that substituted service be executed within seven days, thereby adjourning the case to March 3, 2025.
The FIRS is pursuing a declaratory judgment that holds Binance accountable for annual corporate income tax due to its significant economic presence in Nigeria. Additionally, the agency seeks an order compelling the company to remit overdue taxes for the years 2022 and 2023, along with associated penalties, including annual interest and stipulations based on CBN lending rates until complete payment of taxes is achieved, as well as compensation for the alleged economic losses incurred.