Business News of Thursday, 13 August 2020
Source: www.mynigeria.com
The Lagos state government is set to roll out new taxes for ride hailing services as consumers push back.
The Babajide Sanwo-Olu led Lagos State government is set to tax ride hailing businesses like Uber and Bolt some more--a move that will lead to a hike in fares for the end user, reports Pulse.
The new regulation for ride hailing services will take effect from August 20, 2020.
In a document titled, ‘Guidelines for Online Hailing Business Operation of Taxi in Lagos State 2020’ issued by the Lagos State Ministry of Transportation, “e-hailing Taxi Operation’, all drivers must pay 10 per cent generated on every trip to the Lagos State Government.”
This is contained in Part 4.1, Subsection 5 of the document.
“All operators of e-hailing taxi service must pay the state government 10 percent service tax on each transaction paid by passengers to the operators,” the document partly reads.
The contentious policy also mandates all e-hailing taxi firms to pay N25 million annually to the state government per 1,001 vehicles for an operational licence.
They are also expected to pay N10 million annually for renewal on every 1, 001 cars in their pool.
New firms will also pay a N10 million provisional fee to the state government before the commencement of operations.
Push back from operators
This implies that the state government will collect taxes, licensing fees and then a percentage from every trip completed on these platforms.
“While operators kick against this provision, if it goes ahead to be implemented on August 20, the real losers will be the customers. Uber and Bolt will pass this 10 per cent cost along to end-users, making cab fares more expensive,” TechCabal writes.
The state government also makes it compulsory for all ride hailing services to make their database accessible to the government, reports say
The new policy comes just months after the Lagos state government banned motorcycle-hailing companies like Gokada, MaxNG and O’Ride from operating in the city center. The move led to job losses on an unprecedented scale.
The Lagos state government has been bashed online all week long for "multiple taxes and for making life even more difficult for everyone in the middle of a global COVID-19 pandemic."
From August 20, Online car hailing business (Uber, Bolt etc) must pay Lagos state a fee of NGN 10 million for every 1,000 cars. Annual renewal fee is NGN 5 million.
— Tola (@adetolaov) August 11, 2020
10% of EVERY transaction paid by every passenger will be collected by Lagos state as service tax.
IT GETS WORSE!!