Ghana’s ride-hailing drivers reject new vehicle income tax

Ride-hailing drivers in Ghana are pushing back against a plan by the country’s revenue authority to impose a vehicle income tax, arguing that it would put a strain on their incomes.

Part of the new tax notice, which is expected to go into effect on January 1, 2024, states that “any commercial vehicle owner that earns income from the operation of a commercial vehicle shall pay income tax on a quarterly basis.”

Ride-hailing companies—Uber, Bolt, and Yango—are expected to verify that their driver partners have paid VIT before allowing them to operate on their platforms. Per the notice by the Ghana Revenue Authority (GRA), ride-hailing companies are required to demand a soft copy of the VIT sticker from their drivers, validate the authenticity of the stickers with the GRA, and submit the list of all vehicles on their platforms quarterly to the GRA.

Several drivers who spoke to TechCabal said the new tax was a surprise as they already pay a commission to the ride-hailing companies. The drivers argue that the tax burden should fall on ride-hailing companies instead of individual drivers. Bolt and Uber charge a 20% commission on every trip, while Yango reportedly takes 18%.

“Many of us already struggle due to the current commission structures,” Kwame, an Uber driver, told TechCabal. “Adding another layer of tax on top of fuel costs and car maintenance is like adding more to our problems.”

“They are cheating us,” said John, another ride-hailing driver. “I know many drivers sitting at home because they aren’t satisfied with the commission taken by the ride-hailing companies. So if Ghana Revenue Authority imposes a new tax on us, how will it affect the fares?”

According to a breakdown on GRA’s website, ride-hailing vehicles fall under “Class A” and will pay 12 Ghana Cedis quarterly, totaling 48 GHC annually. The agency mandates all commercial vehicle operators to buy VIT stickers from any Domestic Tax Revenue Office. The sticker is expected to be pasted on the vehicle’s front windscreen.

The new regulation is Ghana’s latest attempt to impose taxes on ride-hailing companies. In April, Ghana’s Driver and Vehicle Licencing Authority (DVLA) introduced the “Digital Transport Guidelines,” which imposed a levy on every ride-hailing trip.

The levy meant that all five ride-hailing firms operating in Ghana would foist an additional charge of one Ghana cedis passenger using their platforms. However, the move was criticized by citizens who already felt the pinch of a flagging economy. Ghana has one of the lowest tax-to-GDP ratios in Africa. According to a report by the Organisation for Economic Co-operation and Development (OECD), Ghana’s tax-to-GDP ratio in 2021 (14.1%)—its highest ever—was lower than the average of the 33 African countries in 2023 (15.6%).