The Federal High Court sitting in Lagos has affirmed the authority of the Federal Inland Revenue Service (FIRS) to collect Value Added Tax (VAT) on food and transportation services offered through ride-hailing and delivery platforms such as Bolt.
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In a judgment delivered by Justice Akintayo Aluko, the court upheld the earlier ruling of the Tax Appeal Tribunal, which validated FIRS’s power to appoint platform operators as agents responsible for VAT compliance on behalf of independent vendors and drivers. The court also awarded a cost of ₦1 million in favour of FIRS against the Bolt operators.
The suit, initially filed by Bolt operators under TAT/LZ/VAT/074/2022, had sought to restrain FIRS from imposing VAT obligations on them, arguing that their appointment contravened Section 10 of the VAT Act.
Following the dismissal of their suit by the Tribunal in May 2023, the appellants, through their counsel Elvis E. Asia, Esq., and others, took the matter before the Federal High Court. They argued that Bolt merely facilitates connections between vendors and customers, and does not itself engage in the supply of goods or services, making the appointment of platform operators as VAT agents unjustifiable.
They further claimed that FIRS overreached its powers under Section 10 of the VAT Act through its Simplification Guidelines, which they said wrongly categorized non-resident digital platforms as direct suppliers.
However, FIRS, represented by Moses Idaho and Olufemi Asekun, asked the court to dismiss the appeal, describing the plaintiffs’ claims as speculative and inconsistent with the factual findings of the Tribunal.
In his ruling, Justice Aluko resolved most of the legal issues in favour of FIRS, affirming that the agency acted within the scope of Section 10(3) of the VAT Act in appointing Bolt as a VAT collection agent.
“There is no valid reason to disturb the judgment of the Tribunal. Consequently, the judgment of the Tribunal delivered on 26th May 2023 is affirmed,” Justice Aluko ruled.
The appeal was dismissed, and the Bolt operators were ordered to pay ₦1 million as the cost of the action.
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