Members of the Amalgamated Union of App-Based Transporters of Nigeria (AUATON) have raised concerns over what they described as double taxation in their operations, particularly on the inDrive platform, warning that the practice is significantly reducing drivers’ take-home income.
In a statement issued on Friday and signed by the union’s National Ex-Officio, Comrade Jossy Adaraniwon, AUATON said drivers using the app are now subjected to combined deductions of about 10 per cent on every trip.
According to the union, this has pushed total commission and tax deductions from the previously known 9.99 per cent to more than 20 per cent in some instances.
The union noted that the application of the new tax regime remains unclear to many drivers, adding that the additional charges are already taking a toll amid rising fuel prices and a worsening cost-of-living situation.
According toAdaraniwo, a preliminary investigation by AUATON, based on recent inDrive trip invoices, suggests that drivers may be bearing a double Value Added Tax (VAT) burden. The invoices reportedly show a 7.5 per cent VAT charged directly on the driver’s trip fare, alongside another 7.5 per cent VAT listed as “service payment VAT” linked to inDrive’s commission.
AUATON argued that while inDrive publicly maintains that it charges a 4.99 per cent commission on trips, VAT should apply only to that commission and not to the full fare already paid by passengers.
“By our calculation, VAT on a 4.99 per cent commission should result in a total effective deduction of about 12.5 per cent, not the higher figures currently reflected in drivers’ invoices,” the statement said.
The union further accused the company of a lack of transparency, alleging that the structure of the deductions points to a possible quiet increase in commission from 9.99 per cent to about 12.5 per cent, despite public claims to the contrary.
Beyond its dispute with the app operator, AUATON also criticised the federal government’s application of VAT to e-hailing services, describing it as unfair and discriminatory.
The union argued that traditional “flag-down” transporters operating on streets, in motor parks and at car parks are not subjected to VAT for providing the same transportation service.
“Singling out e-hailing drivers for a 7.5 per cent VAT is unjustifiable. It places an unnecessary burden on our members’ earnings, reduces their purchasing power, and ultimately affects their standard of living,” the statement added.
AUATON said it rejects any VAT regime that targets app-based drivers alone while exempting other transport operators. The union called on tax authorities to suspend the policy and engage meaningfully with drivers’ representatives and app companies to gain a better understanding of the sector.
“The tax administrator needs to engage the union and all app companies, not just a section of them. Policies should not be implemented in a way that deepens hardship for workers who are already struggling to survive,” Adaraniwon said.
