Nigeria's FIRS Begins Trial Against Major CEX Over Alleged Tax Evasion

Gate News message, April 14 — Nigeria's Federal Inland Revenue Service (FIRS) has commenced trial proceedings against a major centralized exchange over alleged tax evasion charges. The FIRS claims the platform failed to collect and remit Value Added Tax (VAT) and Company Income Tax (CIT) from cryptocurrency transactions and asset transfers involving Nigerian users.

During Monday's hearing before Justice Emeka Nwite at the Federal High Court in Abuja, an FIRS witness testified that the agency's automated tax system, TaxProMax, launched on June 7, 2021, maintains records of all taxpayer transactions. The witness stated that entities not registered on the platform cannot fulfill tax obligations including filing returns, assessments, and payments.

The exchange's legal counsel argued that only entities with "significant economic presence" in Nigeria are required to register for tax purposes. The lawyer clarified that non-Nigerian companies without such presence are not obligated to file tax returns or make tax payments in the country. The court adjourned the trial to April 11, 2025.

The case stems from May 2023 when Nigeria's government accused the exchange of involvement in currency disruption following the naira's crash. Two executives were detained in April 2024; one escaped custody while the other was released in October 2024 due to deteriorating health. The Economic and Financial Crimes Commission (EFCC) separately filed charges alleging approximately $34 million in cybercrimes, money laundering, and foreign exchange violations.

Recently, a released executive claimed via social media that three Nigerian lawmakers demanded a $150 million cryptocurrency bribe, allegations which one lawmaker has publicly denied. The executive also accused the government of requesting user data on opposition figures, raising data privacy concerns.