Home / Business / Lagos Govt To Impose Service Tax, Others On Cab-hailing Operators
Lagos State Governor: Babajide Sanwo-Olu

Lagos Govt To Impose Service Tax, Others On Cab-hailing Operators

Effective August 20, 2020, the Lagos State Government will start the collection of a 10 per cent tax on every transport fare paid by passengers to cab-hailing platforms.

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In the new regulation, service entities in the city with less than 1,000 drivers are expected to pay a N10 million ($27,341) licence fee, while those with more than 1,000 drivers are to pay N25 million ($54,682). Subsequent renewals are pegged at N10 million ($27,341) for those with more than 1,000 drivers and N5 million ($13,670) for those with less.

It also states that taxi and app operators with 50 cabs or less are expected to pay a N5 million ($13,670) licence fee, while those with more than 50 cabs are to pay N10 million ($27,341). The former will pay an annual renewal of N1.5 million (~$3,870), while the latter will renew at N3 million ($7,700).

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Also, vehicles on ride-hailing platforms must possess a Hackney permit issued by the Lagos State Motor Vehicle Administration Agency and be fitted with a corresponding tag.

Other provisions include:

  • All Operators of e-Hailing Taxi Services must pay the State Government 10% service tax on each transaction paid by the passengers to the operators.
  • They must commence the renewal process 3 (three) months before the expiration of the existing licence
  • They must have a quarterly meeting with the Ministry of Transportation for operational updates and feedback
  • All operators of e-hailing taxi services must give the Ministry access to their database

Other regulations include:

  • Car must be brand new
  • Where the vehicle is not new, the vehicle must be within the first three (3) years of its manufacture as specified by the manufacturer
  • The capacity of the vehicle must not be less than 1.3cc
  • It must have a completed, signed, and dated safety features compliance form prescribed by the Ministry
  • The taxicab shall be equipped with a taximeter approved by the Ministry

About Ademola Aderele

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