Nigeria: controversial Lagos’ Road Improvement tax for taxi operations starts August 27
The Lagos State Government says the new guidelines for the volatile Road Improvement Fund for e-hailing operators will commence on August 27.
The government made this known in a Press statement signed by the Chief Press Secretary, Gboyega Akosile, and made available to newsmen.
The release as shared by punch. ng states: “The issues surrounding the new Lagos State Government’s guidelines for the regulations e-hailing taxi services have now been put to rest, following a meeting between the State Government and representatives of the ride-hailing operators on Friday.”
Lagos Governor, Babajide Sanwo-Olu attended the three-hour discussion held at the State House on Marina, Akosile said in the statement.
The statement adds: Briefing the media on the outcome of the meeting, Commissioner for Transportation, Dr. Frederic Oladehinde, disclosed that the State Government and the operators had unanimously adopted the new regulations, after all parties jointly reviewed and fine-tuned some of the contentious items in the framework.
He said the new regulations were not initiated by the Government to extort the operators and drivers in the business; he stressed that the Government was moved by the necessity to regularise the ride-hailing operations in line with security measures.
From the communique read out after the meeting, the enforcement of the new regulations will now take off from August 27, 2020 instead August 20 initially announced by the Government. By implication, the operators now have additional seven-day extension to comply with the Government’s regulations.
Oladehinde said the State Government and the operators had reached an agreement on the controversial service tax, which is to be known as Road Improvement Fund. He said e-hailing operators would be paying N20 as Road Improvement Fund and it is to be levied on each trip all their drivers make in a day.
The Commissioner said Governor Sanwo-Olu offered a duty incentive to the operators, reducing their statutory operational licencing fee and renewal fee by 20 per cent. This implies that each e-hailing firm will now pay N8 million per 1,000 cars fresh licencing and renewal, instead of N10 million initially announced.
The parties, Oladehinde said, also agreed on procurement of comprehensive insurance by the e-hailing companies to cover their drivers and passengers.
He said: “We have just concluded a three-hour meeting which was attended by Governor Sanwo-Olu, Ministry of Transportation officials and representatives of the e-hailing ride operators. After the meeting, we jointly developed a communique to which all parties agreed in relation to the new regulations for e-hailing ride business.
“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 per cent charge. We have come to 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 resolution that there will be reduction in operational licence by 20 per cent. Likewise, the renewal fee has been reduced by 20 per cent, going forward.”
Oladehinde said the State Government had granted all drivers on the e-hailing platforms an extension of 90 days to perfect all documents and licences, required for operation, including driver’s licence and Lagos State Residents Registration Agency (LASRRA) cards.
The Commissioner disclosed that the Government would create a special office for the drivers to fast track necessary registration and documentation before the deadline.
He said the operators acceded to the Government’s position on thorough background check on the drivers for security and improved service delivery.