The Tax Appeal Tribunal’s decision, which upheld the Federal Inland Revenue Service’s (FIRS) authority to collect, collect, and remit Value Added Tax (VAT) on transportation and food services provided by independent drivers and vendors operating through platforms like Bolt, has been upheld by the Federal High Court Sitting in Lagos.
Additionally, Justice Akintayo Aluko provided N1 million for the costs of the FIRS-Bolt operators’ actions.
The Bolt operators claimed that the action constituted a violation of Section 10 of the VAT Act and that FIRS should not be imposing VAT on services provided by independent drivers and vendors.
However, the lawsuit was dismissed by the Tribunal on May 26, 2023.
The operators appealed the decision to the Federal High Court, asking it to overturn it, using their attorney Elvis Asia. They requested a declaration that Section 10 of the VAT Act was not followed by their appointment by FIRS as independent suppliers’ agents for VAT compliance.
Six issues need to be resolved, according to the appellants. The Tribunal erred, in particular, by affirming their appointment as FIRS agents under Sections 10 (3) and (6) without taking into account the prerequisites in subsections (1) and (2).
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They also argued that non-resident suppliers like Bolt were taxable suppliers of goods and services provided by Nigerian vendors, as per FIRS’s Simplification Guidelines, which went beyond Section 10.
Additionally, the appellants argued that Bolt is exempt from the VAT Act because it does not sell food or goods for transportation. Further, they claimed that the Tribunal erred by holding that they lacked the right to contest their appointment and relied on CITA Sections 31 and 49, which were not raised in their pleadings or oral arguments.
They came to the conclusion that the nature of the transactions involved did not justify confirming the appointment and guidelines, even if they were legally binding.
Moses Idaho, the appellants’ attorney, responded by asking the court to dismiss the appeal with substantial costs and claiming that the appellants’ claims were speculative and a distortion of the Tribunal’s decision.
Justice Aluko ruled in favor of FIRS on issues 1, 4, and 6, and on issues 3 in favor of the appellants, and ruled out issues 2 and 5 in his opinion.
The court ruled that the Respondent acted within the law by appointing the Appellant in accordance with Section 10 (3) of the VAT Act based on the evidence that the Tax Appeal Tribunal relied upon in its evaluation of the records of appeal. There is no compelling argument to challenge the Tribunal’s decision. In consequence, the Tribunal’s decision from May 26th, 2023 is confirmed.
Source: Channels TV
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