Court Upholds FIRS’ Right to Collect VAT from Bolt Drivers, Dismisses Appeal

The Federal High Court in Lagos has dismissed an appeal by operators of the ride-hailing platform Bolt, affirming the ruling of the Tax Appeal Tribunal which upheld the authority of the Federal Inland Revenue Service (FIRS) to impose and collect Value Added Tax (VAT) on transportation and food services provided by independent drivers and vendors using such digital platforms.

Justice Akintayo Aluko, who delivered the judgment, also awarded N1 million in legal costs to FIRS, ruling that the tax agency acted within the bounds of the law.

The Bolt operators had earlier taken the matter to the Tribunal, arguing that FIRS had no legal basis to compel them to act as VAT agents for independent vendors. They cited Section 10 of the VAT Act, insisting that such an imposition was a violation. The Tribunal, however, rejected their arguments and ruled in favour of FIRS on May 26, 2023.

Dissatisfied, the operators filed an appeal at the Federal High Court through their counsel, Elvis Asia, seeking to overturn the Tribunal’s decision. They maintained that their appointment as VAT agents did not meet the preconditions under Section 10(1) and (2) of the VAT Act and challenged the validity of FIRS’s Simplification Guidelines.

The appellants further argued that Bolt neither offers transportation nor food services directly and should not be classified as a taxable supplier under the VAT law. They also faulted the Tribunal for claiming they lacked the legal standing to sue, and for relying on provisions of the FIRSEA and CITA which, they argued, were not part of the case.

FIRS counsel, Moses Idaho, urged the court to dismiss the appeal, branding the claims speculative and misleading.

In his ruling, Justice Aluko resolved three out of six issues in favour of FIRS, one for the appellants, and struck out the remaining two. The judge held, “Going by the evidence relied upon by the Tax Appeal Tribunal as revealed in the Records of Appeal… the Respondent acted within the law in appointing the Appellant pursuant to Section 10(3) of the VAT Act. There is no valid reason to disturb the judgment of the Tribunal.”

With that, the appeal was struck out and the Tribunal’s decision was upheld in full.