The Amalgamated Union of App-Based Transporters of Nigeria (AUATON) has raised concerns over what it described as double Value Added Tax (VAT) deductions on trip fares earned by drivers operating on the inDrive platform.
Speaking with the News Agency of Nigeria (NAN) in Lagos on Thursday, the Vice-President of AUATON, South-West, Mr Kolawole Aina, said the development was first noticed by drivers on January 1, 2026, as they resumed operations for the new year.
According to Aina, drivers observed that two separate VAT charges were being deducted from their trip earnings—one listed as service payment VAT and another simply labelled VAT on their invoices.
What they are saying
Describing the tax as an excessive burden on the drivers, the AUTON VP said:
“Our inDrive members were ushered into the New Year 2026 with what we can only describe as an excessive tax burden following a new deduction regime.”
He explained that the additional deductions have increased the total commission and tax charges on the platform from 9.99% to about 12.5% per ride, further squeezing drivers’ already strained earnings.
- AUATON said it was unclear who introduced the additional VAT deductions, but noted that since VAT is a government-imposed tax, the union suspects the involvement of either the Federal Government or the Lagos State Government, possibly in collaboration with the app company.
- The union also criticised what it described as a lack of transparency and consultation, noting that decisions affecting drivers are often taken during meetings between government agencies and app companies without the involvement of drivers’ representatives.
“This double taxation is a burden. Drivers have repeatedly complained that their earnings are insufficient, and now additional deductions are being imposed,” Aina said.
Lack of Communication from InDrive
He added that, to the union’s knowledge, the VAT deductions do not apply to other categories of transport operators such as flag-down taxis, park-based drivers, or other non-app-based transporters.
AUATON further accused inDrive of failing to communicate with drivers or the union on the matter, claiming that attempts to reach the company for clarification had been unsuccessful.
“The company is not responding to calls or messages. Even their email policy only allows responses to individual drivers, which goes against our association’s engagement framework,” Aina said.
- He also alleged that drivers who fail to pay the double VAT deductions are reportedly unable to accept new ride requests on the platform.
- The union has called on inDrive to urgently engage with its drivers and clearly explain the new deduction structure.
- AUATON also appealed to the Federal Government to ensure that app-based transporters are adequately consulted in policy decisions that affect their livelihoods, including ongoing initiatives such as the compressed natural gas (CNG) conversion programme for transport operators.
As of the time of filing this report, inDrive had not publicly responded to the allegations.
What you should know
Nigeria begins the implementation of its new tax laws on January 1, 2026. However, there are no changes regarding VAT rates as it remains 7.5%.
One of the laws, the Nigeria Tax Act 2025, focuses on expanded zero-rated items, enhanced input VAT recovery, digital compliance, and a new revenue-sharing formula.
