The Amalgamated Union of App-Based Transporters of Nigeria (AUATON), the umbrella body for e-hailing drivers, has raised concerns over what it described as double Value Added Tax (VAT) deductions on trip fares earned by drivers using the inDrive platform.
Speaking with the News Agency of Nigeria (NAN) in Lagos on Thursday, the union’s South-West Vice President, Mr Kolawole Aina, said inDrive drivers noticed the additional deductions at the start of the new year on January 1, 2026.
According to Aina, one of the deductions is listed on drivers’ invoices as “service payment VAT,” while the second is simply labelled “VAT,” resulting in what the union considers an excessive tax burden.
He explained that the new deduction structure has increased total commissions and taxes on the inDrive platform from the previous 9.99 per cent to approximately 12.5 per cent per trip.
“Our members were ushered into 2026 with what we can only describe as an excessive taxation regime,” Aina said. “We are unclear about the source of these charges, but since VAT is typically imposed and collected by government authorities, we suspect the deductions were introduced by either the Lagos State Government or the Federal Government, possibly in collaboration with the app company.”
Aina criticised the lack of communication surrounding the decision, noting that drivers were neither informed nor consulted before the deductions were implemented.
He stressed that any discussions between app-based transport companies and government agencies should include representatives of drivers, who are directly affected by such policies.
“This double taxation is a heavy burden on drivers whose earnings are already insufficient. Now, additional costs are being imposed on us,” he said, adding that, to his knowledge, the tax does not apply to other categories of transport operators such as traditional taxis or park-based drivers.
Aina also expressed frustration over the union’s inability to get clarification from inDrive, claiming the company has not responded to calls or messages and appears to limit email responses to individual drivers, contrary to the union’s engagement policy.
He further alleged that drivers who fail to pay the double VAT are prevented from accepting subsequent trips on the platform.
The AUATON executive called on inDrive to urgently explain the new deduction framework to its drivers and appealed to the Federal Government to be more inclusive of app-based transporters in policy formulation, particularly with regard to initiatives such as the Compressed Natural Gas (CNG) conversion programme.