The Federal High Court sitting in Lagos has affirmed the authority of the Federal Inland Revenue Service (FIRS) to charge and collect Value Added Tax (VAT) on food deliveries and transport services carried out by independent vendors and drivers using ride-hailing platforms such as Bolt.

In a ruling delivered by Justice Akintayo Aluko, the court upheld the earlier decision of the Tax Appeal Tribunal (TAT), which recognised FIRS’s powers under Section 10(3) of the VAT Act to appoint platform operators like Bolt as agents for VAT collection and remittance.

The court also awarded N1 million as costs in favour of the FIRS against the Bolt operators, who had approached the court to challenge the agency’s decision.

The operators, through their counsel, Elvis Asia, had initially filed a suit before the Tribunal, arguing that the FIRS lacked the legal basis to appoint them as VAT collection agents for third-party vendors. They contended that such action contravened Section 10 of the VAT Act and sought an order restraining the tax authority from enforcing the directive.

Following the Tribunal’s dismissal of the suit on May 26, 2023, the Bolt operators proceeded to the Federal High Court on appeal, raising six legal issues, including the claim that the FIRS’s Simplification Guidelines went beyond the scope of the law by classifying Bolt as a taxable supplier, even though the platform does not itself provide transportation or food services.

They also argued that the Tribunal erred in its reliance on legal provisions not originally raised in their pleadings and insisted they had the legal standing (locus standi) to challenge the FIRS’s directive.

However, FIRS counsel Moses Idaho urged the court to dismiss the appeal, describing the arguments as speculative and a misinterpretation of the Tribunal’s decision.

Justice Aluko, in his judgement, resolved four of the six issues—including the principal ones—in favour of FIRS. He ruled that the agency acted within its statutory powers in appointing the platform operators as tax agents and that there was no sufficient ground to overturn the Tribunal’s verdict.

“Going by the evidence relied upon by the Tax Appeal Tribunal as revealed in the Records of Appeal, which form the basis of its judgement under scrutiny, the Respondent acted within the law,” the judge held.

Accordingly, the appeal was dismissed, and the earlier judgement of the Tribunal was upheld.