Justice Akintayo Aluko of the Federal High Court in Lagos has affirmed the authority of the Federal Inland Revenue Service to collect Value Added Tax on food and transport services provided through ride-hailing and delivery platforms like Bolt.
In a judgment delivered on Thursday, the court dismissed an appeal filed by Bolt’s Nigerian operators and upheld the earlier decision of the Tax Appeal Tribunal, which had ruled in favour of the FIRS. The court also awarded N1m, in costs against the appellants.
“There is no valid reason to disturb the judgment of the Tribunal,” Justice Aluko held. “The Respondent acted within the law in appointing the Appellant pursuant to Section 10(3) of the VAT Act. Consequently, the judgment of the Tribunal delivered on May 26, 2023, is affirmed.”
The dispute began when Bolt’s operators challenged the FIRS’s decision to impose VAT on services rendered by independent drivers and food vendors using the Bolt platform.
They filed suit No.TAT/LZ/VAT/074/2022 before the Tribunal, arguing that the move violated Section 10 of the VAT Act, especially since Bolt itself does not provide the services directly.
After the Tribunal dismissed the suit on May 26, 2023, the operators, represented by counsel Elvis E. Asia, and supported by Blessing Uwejewah and P.O. Okujere, appealed to the Federal High Court. They argued that their appointment as VAT collection agents by the FIRS was invalid and inconsistent with provisions of the VAT Act.
The appellants raised six issues for the court’s determination. Central to their case was the contention that FIRS’s Simplification Guidelines wrongly categorized Bolt as a supplier, even though the platform merely connects users with independent service providers.
“Bolt does not offer transportation or food vending services and therefore cannot be classified as a taxable supplier under the VAT Act,” their counsel argued, adding that the Tribunal had erred in affirming their appointment without addressing the conditions outlined in subsections (1) and (2) of Section 10.
They further challenged the Tribunal’s position that they lacked locus standi to question their appointment, accusing the lower body of relying on legal provisions Sections 31 of FIRSEA and 49 of CITA that were never pleaded or argued.
FIRS’s lead counsel, Moses Idaho, supported by Olufemi Asekun, urged the court to uphold the Tribunal’s decision and described the appellants’ arguments as speculative and unfounded.
In his ruling, Justice Aluko found merit in only one of the appellants’ arguments (Issue 3) but upheld FIRS’s position on three others (Issues 1, 4, and 6), while striking out Issues 2 and 5.
“The appeal thus fails and it is accordingly dismissed,” the judge ruled, adding, “Cost of the action assessed in the sum of N1,000,000 (One Million Naira) only is awarded in favour of the Respondent against the Appellant.”
