E-HAILING: Lagos govt reverses 10% service tax, slashes licence fee

The Lagos State Government on Friday reversed the plan to impose a 10 percent service charge on every trip made through e-hailing platforms like Uber and Bolt.

The state’s Commissioner for Transport, Dr. Frederic Oladeinde, disclosed this to journalists after a meeting between the state government and e-hailing operators at Lagos House, Marina.

Oladeinde, who read out the communiqué’ issued at the end of the meeting, said the enforcement of the new regulations would now take off from August 27.

The government had previously said the enforcement of the new regulations would commence on August 20.

The commissioner said the e-hailing operators would be required to pay N20 as Road Improvement Fund, adding that this would be levied on each trip the drivers undertake in a day.

He added that Governor Babajide Sanwo-Olu offered a duty incentive to the operators, reduced their statutory operational licencing fee and renewal fee by 20 percent.

READ ALSO: Lagos Assembly proposes N20m licence fee for lottery, betting operators

He said: “The regulations for the e-hailing companies will take effect from August 27, 2020. We have given an additional one-week extension for all operators to comply. Given that most of the drivers on the e-hailing platforms have third party insurance, the companies will have comprehensive insurance for each driver while the driver is working with them. The insurance will also cover passengers, which amounts to double insurance for the driver.

“We also discussed the issue of service tax, which was initially defined as 10 percent charge. We have come to the resolution that the levy will become a flat fee of N20 per trip. We no longer call it service tax; we now call it Road Improvement Fund, which will be levied per trip. We also came to the resolution that there will be a reduction in operational licence by 20 percent. Likewise, the renewal fee has been reduced by 20 percent, going forward.”

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