The Federal High Court in Lagos has upheld the authority of the Federal Inland Revenue Service (FIRS) to collect Value Added Tax (VAT) on services provided through ride-hailing and food delivery platforms like Bolt, in a landmark judgment that affirms the agency’s expansive tax collection powers under the VAT Act.
Justice Akintayo Aluko delivered the ruling on Thursday, dismissing an appeal brought by the operators of Bolt in Nigeria and affirming an earlier decision by the Tax Appeal Tribunal. The court ruled that Bolt, though not the direct provider of transportation or food services, qualifies as a VAT collection agent under Section 10(3) of the VAT Act. The judge also awarded N1 million in costs against the appellants.
“There is no valid reason to disturb the judgment of the Tribunal,” Justice Aluko said. “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 legal dispute originated when Bolt challenged FIRS’s appointment of the platform as a VAT collection agent, arguing that the services were rendered by independent drivers and vendors—not the company itself. The company claimed the move was inconsistent with the law and objected to the FIRS’s Simplification Guidelines, which categorized Bolt as a supplier.
Bolt’s legal team, led by Elvis E. Asia, argued that the Tribunal erred by affirming their appointment without meeting the legal conditions set out in Sections 10(1) and 10(2) of the VAT Act. They also contested the Tribunal’s ruling on locus standi and the application of legal provisions not formally raised during proceedings.
However, the court sided with FIRS on most of the issues. Justice Aluko only found merit in one of Bolt’s six grounds of appeal but upheld the FIRS’s position on three and struck out two. “The appeal thus fails and it is accordingly dismissed,” he concluded.
The judgment sets a critical precedent for digital platforms operating in Nigeria, confirming that intermediaries facilitating services may be held liable for VAT collection—even when they are not the direct service providers.
