Members of the Amalgamated Union of App-Based Transporters of Nigeria (AUATON) have raised concerns over what they describe as double taxation affecting drivers operating on the inDrive platform.
The union disclosed this in a statement signed on Friday by its National Ex-Officio, Comrade Jossy Adaraniwon, alleging that recent deductions on the app have significantly reduced drivers’ earnings.
According to AUATON, drivers are now subjected to combined deductions of about 10 per cent on every trip, pushing total commission and tax charges from the previous 9.99 per cent to over 20 per cent in some cases. The union noted that the situation has created confusion, as many drivers are unclear about the actual provisions of the new tax law.
AUATON said the additional charges are already taking a toll on drivers, especially amid rising fuel prices and the increasing cost of living.
A preliminary investigation by the union, based on recent inDrive trip invoices, suggested that drivers are being subjected to what it described as 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” tied to inDrive’s commission.
The union explained that while inDrive publicly claims to charge a 4.99 per cent commission on trips, VAT should only apply to that commission and not to the full trip fare, which it said has already been taxed.
“By our calculation, VAT on a 4.99 per cent commission should result in a
AUATON accused the company of a lack of transparency, arguing that VAT on service payments should be limited to the commission due to inDrive, which it described as a matter strictly between the company and the government.
The union further alleged that the pattern of deductions suggests that inDrive may have quietly increased its commission from 9.99 per cent to about 12.5 per cent, despite publicly maintaining that it charges only 4.99 per cent.
Beyond its concerns with the app company, AUATON also criticised the federal government’s application of VAT to e-hailing services, describing the policy as unfair and discriminatory. The union argued that traditional “flag-down” transport operators working on streets, in motor parks and 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 union said.
AUATON stated that it rejects any VAT regime that targets app-based drivers while exempting other transport operators. It called on tax authorities to suspend the policy and engage meaningfully with drivers’ representatives and app companies to better understand 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,” the statement added.
