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.
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.
“This double taxation is a burden. Drivers have repeatedly complained that their earnings are insufficient, and now additional deductions are being imposed,” Aina said.
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.
As of the time of filing this report, inDrive had not publicly responded to the allegations.
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.