Members of the Amalgamated Union of App-Based Transporters of Nigeria have raised the alarm over what they describe as double taxation in their operations, particularly on the inDrive platform.
This was disclosed in a statement signed on Friday by the AUATON National Ex-Officio, Comrade Jossy Adaraniwon.
According to the union, drivers using the app are now subjected to a combined deduction of about 10 per cent on every trip, a development that has pushed total commission and tax deductions from the previous 9.99 per cent to over 20 per cent in some cases.
The new tax law has remained ambiguous to many.
AUATON said the new charges are already biting hard, further shrinking drivers’ take-home income at a time of rising fuel prices and increasing cost of living.
The statement added that a preliminary investigation by the union, based on recent inDrive trip invoices, suggests that drivers are being subjected to what it described as a double Value Added Tax burden.
According to the invoices, a 7.5 per cent VAT is charged directly on the driver’s trip fare, alongside another 7.5 per cent VAT listed as “service payment VAT” linked to inDrive’s commission.
The union explained that inDrive publicly claims to charge a 4.99 per cent commission on trips. However, AUATON argued that VAT should only apply to the commission amount and not to the full trip fare, which has already been taxed.
The statement said, “By our calculation, VAT on a 4.99 per cent commission should result in a total effective deduction of about 12.5 per cent, not the higher figures currently reflected in drivers’ invoices.
“What we are seeing from the invoice narration points to a deliberate lack of transparency. The VAT on service payment should be charged only on the commission due to inDrive, which is a matter between the company and the government. It should not be imposed again on the driver’s fare, which has already attracted VAT.”
AUATON further alleged that the structure of the deductions suggests that inDrive may have quietly increased its commission from 9.99 per cent to about 12.5 per cent, despite publicly maintaining that it charges only 4.99 per cent.
Beyond the dispute with the app company, the union also criticised the federal government over the application of VAT to e-hailing services. AUATON described the policy as unfair and discriminatory, arguing that traditional “flag-down” transporters operating on streets, in motor parks, and at car parks are not subjected to VAT for providing the same transportation service.
“Singling out e-hailing drivers for a 7.5 per cent VAT is unjustifiable. It places an unnecessary burden on our members’ earnings, reduces their purchasing power, and ultimately affects their standard of living,” the union said.
As a result, AUATON said it rejects any VAT regime that targets app-based drivers alone while exempting other transport operators. The union called on tax authorities to suspend the policy and engage meaningfully with drivers’ representatives and app companies to better understand the sector.
“The tax administrator needs to engage the union and all app companies, not just a section of them. Policies should not be implemented in a way that deepens hardship for workers who are already struggling to survive,” he added.
