E-hailing drivers operating on the inDrive platform have levied serious accusations against the company, alleging double charges for Value Added Tax (VAT) and an unannounced increase in commission rates. Drivers who provided their trip narrations to Technext reported that as of January 1, 2024, inDrive began deducting a 7.5 percent VAT as part of trip deductibles, followed by another 7.5 percent VAT on their commission, effectively resulting in double taxation.

According to the drivers, this new deduction structure means a 7.5 percent VAT is applied directly to every trip for providing transportation services. Additionally, inDrive imposes another 7.5 percent VAT on what it terms 'service payment,' which drivers contend is the company's own commission. Drivers argue that this 'service payment' VAT should be borne by inDrive itself, as it pertains to the service they claim to provide—managing the platform—and should be paid from the commission they receive, not passed on to the drivers. They emphasize that if the government intends to levy VAT against inDrive for its services, it should apply to inDrive's earned commission (e.g., 9.99 percent) and not be an additional charge on the fare cost paid by the driver.

Beyond the VAT dispute, drivers also accuse inDrive of increasing its commission rate from 9.99 percent to 12.5 percent. This adjustment, combined with the 7.5 percent VAT now levied against the driver for the service provided, brings the total overall deductible per trip to 20 percent, significantly impacting driver earnings.

In response to these developments, the Amalgamated Union of App-based Transporters of Nigeria (AUATON) has vehemently rejected the 7.5 percent VAT imposed on its members. In a statement to Technext, the union described the tax as discriminatory and unjustifiable, highlighting that the federal government appears to have singled out e-hailing operators for VAT payment, while other transport workers, such as those operating on streets, garages, and car parks, are exempt from similar taxes under the new tax administration.

AUATON further asserted that this 7.5 percent VAT adds an unnecessary financial burden on e-hailing drivers, negatively affecting their purchasing power and standard of living. The union unequivocally rejects any transportation service VAT that specifically targets e-hailing drivers and calls for the tax administrators to engage with both the union and app companies. This engagement is crucial for gaining a clearer understanding of the sector's unique operational dynamics, rather than implementing burdensome schemes based on limited consultation with only a section of the app companies.