Bolt has filed an appeal in the Lagos court challenging the legality of imposing VAT on services provided by its drivers and food vendors.
Overview of Bolt vs FIRS Case
Bolt has submitted an appeal to the Lagos Court to contest a High Court ruling that allowed the Federal Inland Revenue Service (FIRS) to impose 5% VAT on transportation and food services provided by its drivers and vendors. This development marks a new stage in the company's attempts to dispute the tax authority’s jurisdiction.
Court Rulings and Bolt's Arguments
In its appeal, Bolt questions the legality of the fair hearing and the FIRS's imposition of VAT on suppliers below the N25 million threshold. The company's lawyer, Elvis Asia, argues that such actions represent a misinterpretation of the law, and the court has misguided itself regarding Section 10(3). Bolt contends that sustaining this judgment would unjustly tax independent drivers and vendors, as they are not employees and do not provide direct transport or food services.
Context of VAT in Nigeria
Since 2019, FIRS has applied a 5% VAT on online transactions, affecting various businesses in Nigeria's internet economy. According to the tax directive, if a business operates in Nigeria, it is liable for VAT regardless of whether the goods were previously taxed in their country of origin. Bolt claims it has no physical presence in Nigeria, and its drivers and vendors act as independent agents.
The Court of Appeal has yet to set a date for the hearing, but the case continues to evolve, highlighting the complex relationship between digital solution companies and tax authorities in Nigeria.
