A Federal High Court has upheld the right of the Federal Inland Revenue Service (FIRS) to collect Value Added Tax (VAT) on food deliveries facilitated by Bolt operators in Nigeria.
Justice Akintayo Aluko dismissed an appeal filed by Bolt operators, affirming the May 26, 2023, decision of the Tax Appeal Tribunal. The court also awarded N1 million in costs to FIRS against the Bolt operators.
The Bolt operators had initially sought to prevent FIRS from imposing VAT on services offered by independent drivers and vendors, arguing it violated Section 10 of the VAT Act. After the Tribunal dismissed their suit, they appealed to the Federal High Court.
Their appeal centered on several arguments:
1. The Tribunal erred by confirming their appointment as FIRS agents under Sections 10(3) and (6) without considering the preconditions in subsections (1) and (2) of the VAT Act.
2. FIRS's Simplification Guidelines incorrectly categorized non-resident suppliers like Bolt as taxable suppliers for goods and services provided by Nigerian vendors, exceeding the scope of Section 10.
3.Bolt itself does not engage in transportation or food vending and therefore should not be treated as a taxable supplier.
4. The Tribunal erred in holding they lacked locus standi to challenge their appointment and relied on Sections 31 of FIRSEA and 49 of CITA, which were not part of their pleadings.
5. Even if the appointment and guidelines were valid, the nature of the transactions did not justify such confirmation.
FIRS, represented by counsel Moses Idaho, urged the court to dismiss the appeal, describing the appellants' claims as speculative and a misrepresentation.
Justice Aluko, in his judgment, ruled largely in favour of FIRS, stating that the Respondent (FIRS) acted within the law in appointing the Appellant (Bolt operators) pursuant to Section 10(3) of the VAT Act.
He affirmed the Tribunal's judgment, dismissing the appeal and ordering the Bolt operators to pay N1 million in costs to FIRS.