The Amalgamated Union of App-Based Transporters of Nigeria has raised concerns over what it described as double Value Added Tax deductions on fares earned by drivers using the inDrive platform.

Speaking in Lagos on Thursday, AUATON’s South-West Vice-President, Mr. Kolawole Aina, said drivers first noticed the issue on January 1, 2026, when they resumed operations for the new year.
Aina explained that drivers observed two separate VAT deductions on their trip earnings, one listed as “service payment VAT” and the other simply as “VAT” on their invoices, according to the News Agency of Nigeria.

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 raised the total commission and tax charges on the platform from 9.99 per cent to around 12.5% per ride, further reducing drivers’ already strained earnings.

AUATON noted that it is unclear who introduced the extra VAT deductions but suggested that, since VAT is a government-imposed tax, the move may involve either the Federal Government or the Lagos State Government, possibly in collaboration with the app company.

The union also criticized what it called a lack of transparency and consultation, pointing out that decisions affecting drivers are often made in meetings between government agencies and app companies, with drivers’ representatives excluded from the process.

“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 services.

Nigeria began implementing its new tax laws on January 1, 2026; however, the VAT rate remains unchanged at 7.5 per cent.