A Federal High Court ruling has clarified that ride-hailing and food delivery platforms like Bolt can legally be compelled to collect Value Added Tax (VAT) on services provided through their apps a decision that could redefine the future of Nigeria’s digital economy and platform-based businesses.
Justice Akintayo Aluko delivered the judgment in Lagos on Thursday, dismissing an appeal filed by Bolt’s Nigerian operators and upholding an earlier decision by the Tax Appeal Tribunal (TAT). The court also awarded ₦1 million in legal costs against the company.
“The respondent acted within the law,” Justice Aluko ruled. “There is no valid reason to disturb the decision of the Tribunal. Consequently, the judgment of the TAT delivered on May 26, 2023, is affirmed.”
At the centre of the case was the question of whether digital platforms that do not directly provide food or transportation services but merely connect users with independent drivers or vendors can be held responsible for collecting and remitting VAT.
Bolt’s legal team, led by counsel Elvis E. Asia, had argued that appointing the company as a VAT agent violated provisions of the Value Added Tax Act, particularly Section 10. According to the defence, Bolt is not a “supplier” within the meaning of the law, as it neither owns the cars nor delivers the food listed on its platform.
“Bolt does not offer transportation or food vending services and therefore cannot be classified as a taxable supplier under the VAT Act,” Asia stated during submissions.
The case, originally filed before the TAT in suit No. TAT/LZ/VAT/074/2022, was the company’s attempt to challenge the Federal Inland Revenue Service’s 2022 Simplification Guidelines, which mandated that platform operators collect VAT on behalf of their independent service providers.
FIRS counsel, Moses Idaho, supported by Olufemi Asekun, countered that the appeal lacked substance and urged the court to maintain the earlier judgment.
“The appellants’ arguments are speculative and unfounded,” Idaho argued, citing Sections 31 of the FIRS Establishment Act and 49 of the Companies Income Tax Act (CITA).
Justice Aluko upheld FIRS’s position on three of the six legal issues raised and only found partial merit in one. Two others were struck out entirely. The judge concluded, “The appeal thus fails and is accordingly dismissed.”
The development also aligns with Nigeria’s broader effort to close tax leakages in the informal and digital sectors. Since 2021, the FIRS has intensified efforts to bring ride-hailing, fintech, and e-commerce platforms under its tax net, arguing that the structure of modern business requires modern enforcement.
