The Federal High Court in Lagos has upheld a ruling, confirming the Federal Inland Revenue Service’s (FIRS) authority to collect Value Added Tax (VAT) on food delivery and transportation services provided by independent drivers and vendors operating through Bolt.
The court also ordered the Bolt operators to pay N1 million in costs to FIRS.
The legal dispute began when Bolt operators challenged FIRS’s imposition of VAT on their services at the Tax Appeal Tribunal, arguing it violated Section 10 of the VAT Act.
The Tribunal dismissed their case on May 26, 2023, prompting the operators to appeal to the Federal High Court.
The Bolt operators argued that the FIRS illegally told Bolt to collect sales tax for them. They also said the first court made a mistake by agreeing with FIRS, because it didn’t check if FIRS had followed all the necessary rules in the tax law before doing so.
They also argued that FIRS’s Simplification Guidelines incorrectly classified non-resident suppliers like Bolt as taxable for services rendered by Nigerian vendors, and that Bolt itself does not directly provide transportation or food vending services, thus not being a taxable supplier.
Furthermore, they claimed the Tribunal was wrong to rule they lacked the legal standing to bring the case.
Representing FIRS, counsel Moses Idaho urged the court to dismiss the appeal, characterizing the operators’ claims as speculative.
Justice Akintayo Aluko ultimately ruled in favor of FIRS on key issues, affirming that FIRS acted within its legal rights by appointing Bolt as an agent under Section 10(3) of the VAT Act.
The court dismissed the appeal and imposed the N1 million cost on theBolt Operators.
