The Amalgamated Union of App-based Transporters of Nigeria (AUATON) has kicked against what it describes as an unfair and burdensome tax imposition on its members at the start of the new year.
Union Decries Double VAT and Hidden Commission Hike
According to the union, its members were ushered into 2026 with a fresh financial burden: a 10 per cent deduction from every trip completed on the inDrive platform. This development, they allege, has pushed the total commission deductions on the app from an initial rate to 20 per cent and above.
AUATON National Ex-officio, Jossy Adaraniwon, stated that a preliminary investigation revealed a lack of transparency in the app's invoice system, leading to what he termed a double VAT burden on drivers' services.
He explained the union's position clearly: The government's 7.5 per cent Value Added Tax should apply only to the commission due to inDrive, which is a matter between the company and the government. It should not be applied to the total trip fare, which already carries a 7.5 per cent VAT charge.
Call for Government Review and Policy Fairness
Adaraniwon argued that the correct total commission should be 12.5 per cent, comprising the company's 4.99 per cent commission plus the 7.5 per cent VAT on that commission. However, he accused inDrive of increasing its effective commission from 9.99 per cent to 12.5 per cent, contrary to its public claim of a 4.99 per cent rate.
The union is now calling on the Federal Government to reconsider the VAT imposed specifically on app-based transport services. They label the policy as discriminatory, unjustifiable, and unfair.
"Other flag-down transporters operating on the streets, at garages and car parks are not levied VAT for rendering the same service, which is exempted under the new tax administration," Adaraniwon said.
Impact on Drivers' Livelihoods
The union leader highlighted the direct negative consequences of this tax on its members. Imposing a 7.5 per cent VAT on e-hailing services places an unnecessary strain on drivers' earnings.
This additional financial pressure ultimately reduces their purchasing power and contributes to a lower standard of living for thousands of app-based transporters across Nigeria. The union's stance sets the stage for a potential confrontation with both the platform operator and tax authorities as they seek equitable treatment.
