The Amalgamated Union of App-Based mostly Transporters of Nigeria (AUATON) has raised issues over what it described as double Worth Added Tax (VAT) deductions on journey fares earned by drivers working on the inDrive platform.
Talking with the Information Company of Nigeria (NAN) in Lagos on Thursday, the Vice-President of AUATON, South-West, Mr Kolawole Aina, mentioned the event was first observed by drivers on January 1, 2026, as they resumed operations for the brand new 12 months.
In keeping with Aina, drivers noticed that two separate VAT expenses had been being deducted from their journey earnings—one listed as service cost VAT and one other merely labelled VAT on their invoices.
Describing the tax as an extreme burden on the drivers, the AUTON VP mentioned:
“Our inDrive members had been ushered into the New Yr 2026 with what we will solely describe as an extreme tax burden following a brand new deduction regime.”
He defined that the further deductions have elevated the whole fee and tax expenses on the platform from 9.99% to about 12.5% per journey, additional squeezing drivers’ already strained earnings.
“This double taxation is a burden. Drivers have repeatedly complained that their earnings are inadequate, and now further deductions are being imposed,” Aina mentioned.
He added that, to the union’s data, the VAT deductions don’t apply to different classes of transport operators equivalent to flag-down taxis, park-based drivers, or different non-app-based transporters.
AUATON additional accused inDrive of failing to speak with drivers or the union on the matter, claiming that makes an attempt to succeed in the corporate for clarification had been unsuccessful.
“The corporate shouldn’t be responding to calls or messages. Even their electronic mail coverage solely permits responses to particular person drivers, which works towards our affiliation’s engagement framework,” Aina mentioned.
As of the time of submitting this report, inDrive had not publicly responded to the allegations.
Nigeria begins the implementation of its new tax legal guidelines on January 1, 2026. Nonetheless, there aren’t any modifications relating to VAT charges because it stays 7.5%.
One of many legal guidelines, the Nigeria Tax Act 2025, focuses on expanded zero-rated objects, enhanced enter VAT restoration, digital compliance, and a brand new revenue-sharing method.
