THE Federal High Court Sitting in Lagos has affirmed the decision of the Tax Appeal Tribunal, which upheld the Federal Inland Revenue Service’s (FIRS) authority to charge, collect, and remit Value Added Tax (VAT) on transportation and food services provided by independent drivers and vendors operating via platforms like Bolt.
Justice Akintayo Aluko also awarded N1 million as the cost of the action in favour of FIRS against the Bolt operators.
The Bolt operators had filed the suit before the Tribunal, seeking an order to restrain FIRS from imposing VAT on services offered by independent drivers and vendors, arguing that such action violated Section 10 of the VAT Act.
The Tribunal, however, dismissed the suit on May 26, 2023.
Dissatisfied with the ruling, the operators, through their counsel Elvis Asia, appealed to the Federal High Court, asking it to overturn the decision. They sought a declaration that their appointment by FIRS as agents responsible for VAT compliance on behalf of independent suppliers was inconsistent with Section 10 of the VAT Act.
The appellants raised six issues for determination. Key among them was the argument that the Tribunal erred by affirming their appointment as FIRS agents under Sections 10(3) and (6) without considering the preconditions in subsections (1) and (2).
They also contended that FIRS’s Simplification Guidelines exceeded the scope of Section 10 by wrongly categorizing non-resident suppliers like Bolt as taxable suppliers of goods and services provided by Nigerian vendors.
Additionally, the appellants argued that Bolt itself does not engage in transportation or food vending and thus cannot be treated as a taxable supplier under the VAT Act.
They further claimed the Tribunal erred in holding that they lacked locus standi to challenge their appointment and relied on Sections 31 of the FIRSEA and 49 of CITA, which were not raised in their pleadings or argued in court.
They concluded that even if the appointment and guidelines were valid under the law, the nature of the transactions involved did not justify such confirmation.
In response, FIRS’s counsel, Moses Idaho, asked the court to dismiss the appeal with substantial costs, describing the appellants’ claims as speculative and a misrepresentation of the Tribunal’s ruling.
In his judgment, Justice Aluko resolved Issues 1, 4, and 6 in favour of FIRS; Issue 3 in favour of the appellants; and struck out Issues 2 and 5.
The court held, “Going by the evidence relied upon by the Tax Appeal Tribunal as revealed in the Records of Appeal, which form the basis of its judgment under scrutiny, 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. Consequently, the judgment of the Tribunal delivered on 26th May 2023 is affirmed.
The appeal thus fails, and it is accordingly dismissed. Cost of the action assessed in the sum of N1,000,000 (One Million Naira) only is awarded in favour of the Respondent against the Appellant.”
