Nigeria: Federal Inland Revenue Service empowered to appoint non-resident suppliers as agents of VAT collection

Tax Appeal Tribunal Lagos Zone

Federal Inland Revenue Service empowered to appoint non-resident suppliers

The Tax Appeal Tribunal Lagos Zone held that the Federal Inland Revenue Service (FIRS) validly exercised its powers under the value added tax (VAT) law to appoint a non-resident supplier as an agent of collection of VAT from both the activities of the food vendors and drivers that use the company’s platform to provide services to customers.

The Tribunal also clarified that the Federal Inland Revenue Service’s guidelines entitled, Guidelines on Simplified Compliance Regime for Value Added Tax (VAT) for Non-Resident Suppliers, is not excluded from Section 10 of the VAT law.

The case is: Bolt Operations OU v. Federal Inland Revenue Service

KPMG observation

The VAT obligations for businesses operating online marketplace businesses have been a subject of contentious debate between the FIRS and the affected businesses. The government, through Finance Acts 2020 and 2021, sought to clarify some of these issues by defining the VAT compliance obligations for the various players and empowering the Federal Inland Revenue Service to appoint and/ or allocate obligations to any of the players for ease of collection of the tax. The Tribunal’s decision clarifies the conflicting positions held by the different parties regarding the powers of the FIRS to appoint any person involved in online marketplace transactions to collect and remit the VAT due.

Based on the Tribunal’s decision, online marketplace businesses now have additional VAT obligations in respect of domestic transactions between taxable persons resident in Nigeria. One significant clarification provided by the Tribunal is that the VAT law does not impose any condition precedent before the FIRS can exercise the power to appoint any person as the agent of VAT collection. The Tribunal’s position appears to rely on the principles of convenience and management of cost of collection of taxes.

Read a June 2023 report [PDF 1.4 MB] prepared by the KPMG member firm in Nigeria



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.