Federal High Court Delivers Judgment in Bolt’s Dispute With FIRS Over VAT
- A Federal High Court in Lagos has affirmed FIRS's power to collect VAT on transport and food services
- The service offered through platforms like Bolt had appealed an earlier judgment that VAT should be collected
- There is now an expectation that the cost of service could change to cover the additional tax payment
A Federal High Court has ruled that the Federal Inland Revenue Service (FIRS) has the right to collect value-added tax (VAT) on transport and food services provided through digital platforms such as Bolt.
Source: Getty Images
Justice Akintayo Aluko delivered the ruling, affirming an earlier decision by the Tax Appeal Tribunal (TAT) which recognised the FIRS’s right to appoint ride-hailing and food delivery platforms as VAT collection agents.
The court also imposed a cost of N1 million against the Bolt operators who brought the appeal.
Why the legal battle between FIRS and Bolt
The Cable reports that the legal dispute began in 2022 when the operators, under suit No. TAT/LZ/VAT/074/2022 challenged the FIRS' imposition of VAT on services rendered through the Bolt platform.
They argued that Bolt, as a non-resident digital intermediary, should not be considered a taxable supplier under Section 10 of the VAT Act.
However, the TAT dismissed the case in May 2023, prompting the operators to escalate the matter to the Federal High Court.
Elvis Asia, Bolt's legal representative, contended that the FIRS exceeded its legal authority by designating them as tax agents without meeting the conditions stipulated under subsections (1) and (2) of Section 10.
The appellant also criticised the FIRS’ guidelines, claiming Bolt does not directly supply transportation or food services and therefore should not be taxed as such.
In response, FIRS counsel Moses Idaho urged the court to dismiss the appeal, describing the claims as speculative and lacking legal merit.
Source: Getty Images
High court rules in favour of FIRS
In his judgment, Justice Aluko ruled in favour of the FIRS, stating the tax agency had acted within its powers under Section 10(3) of the VAT Act by appointing the digital platform as a collection agent.
Aluko stated:
“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 fails and is accordingly dismissed.”
The judge also awarded N1 million in legal costs in favour of the FIRS.
The ruling reinforces the FIRS's 2019 directive to impose VAT on digital transactions, both domestic and cross-border, effective January 2020.
4 major benefits in Nigeria’s new tax law taking effect in 2026
Earlier, Legit.ng reported that Nigeria has a new tax law, signed by President Bola Tinubu, and it is set to become effective in January 2026.
President Bola Ahmed Tinubu has signed into law four major tax reform bills, marking a significant shift in how taxes will be collected, paid, and administered in Nigeria.
The reforms, which take effect from January 1, 2026, aim to simplify the tax regime, reduce multiple taxation, and provide relief to low-income earners and small businesses.
A tax expert, Aderonke Atoyebi, listed four key benefits and changes in the new laws, which will benefit Nigerians.
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Source: Legit.ng
