Transportation costs might increase as Lagos government introduces new taxes

Commuters in Lagos might have to pay more for ride-hailing services like Uber and Bolt due to a new regulation being introduced by the Lagos State Government.

This is coming soon after the state government increased LAGBUS fares by 46 per cent

The new regulation for e-hailing taxing services is set to come into effect on August 20, 2020.

This is according to a document titled, ‘Guidelines for Online Hailing Business Operation of Taxi in Lagos State 2020’ issued by the Lagos State Ministry of Transportation.

According to Part 4.1 subsection 5 of the document titled, ‘e-Hailing Taxi Operation’, all drivers must pay 10 per cent generated on every trip to the Lagos State Government.

“All operators of e-hailing taxi service must pay the state government 10 per cent service tax on each transaction paid by passengers to the operators,” the document partly read.

The new policy also mandates all e-hailing taxi firms to pay N25m yearly to the state government per 1,001 vehicles for an operational licence while they will pay N10m yearly for renewal on every 1, 001 cars in their pool.

New companies would also pay a N10m provisional fee to the state government before starting operations.

According to analysis by Techcabal, this implies that the state government will collect taxes, licensing fees and then a percentage from every trip completed on these platforms.

The state government also makes it compulsory for all ride-hailing services to make their database accessible to the government.

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