From the busy streets of Nairobi and Lagos to the vibrant avenues of Accra, Johannesburg, and Tunis, ride-hailing has become a part of daily life.
Apps like Bolt, Uber, and Yassir has made it easier for people to move around these fast-paced cities.
These platforms offer the promise of affordable, reliable transportation at the tap of a button.
But as the industry continues to grow, so do the challenges for governments trying to keep up.
In Tunisia, Bolt is currently facing accusations of tax evasion and operating without proper licenses.
This has given rise to a pressing question: how do we make sure that these services contribute fairly to the economy without stifling growth or innovation?
Here’s a look at how different countries are approaching the taxation of ride-hailing companies.
Kenya
Kenya has been one of the more progressive nations in taxing the digital economy.
Ride-hailing companies like Uber and Bolt are subject to a 16% Value Added Tax (VAT), while drivers must pay income tax on their earnings.
Additionally, Kenya has introduced a 1.5% Digital Services Tax (DST) on the gross income of foreign digital service providers, ensuring that international platforms contribute to the national economy.
Despite these policies, enforcement remains a challenge. Many ride-hailing drivers operate as independent contractors, making tax compliance harder to track.
As the gig economy expands, the government must find effective ways to ensure that both companies and drivers meet their tax obligations.
In 2023, Uber’s operations in Kenya contributed an estimated $109.08 million to the economy, according to its first Kenya Economic Impact Report.
This included $17.02 million in earnings for drivers and delivery partners, $2.09 million in tourism-related spending, and $4.13 million in added value for restaurants through Uber Eats.
The Kenya Revenue Authority (KRA) reported that the entire digital taxi-hailing and delivery industry generated $124.3 million in revenue in the year ending June 2024.
Of this, Bolt, LittleCab, and other players contributed around $14.39 million
However, the combined revenue of Kenya’s top three ride-hailing firms, Uber, Bolt, and LittleCab, declined from $50.8 million in 2023 to $48.7 million in 2024, reflecting shifts in the market.
In addition to this, the KRA has audited digital taxi-hailing firms, including Uber and Bolt, for potential tax liabilities.
The audit revealed that one firm alone owed $266,000 in various taxes.
The KRA identified challenges in taxing these companies, particularly due to some being registered abroad, which complicates the determination of taxes owed.
Additionally, many drivers had not been paying taxes on their earnings, leading to further compliance concerns.
To combat this and improve compliance, KRA has introduced a real-time tax system to track transactions.
Meanwhile, the 2024 Finance Bill proposed a 6% Significant Economic Presence (SEP) tax on non-resident digital service providers, including ride-hailing firms, which faced opposition.
South Africa
South Africa has taken a structured approach to regulating ride-hailing services, balancing taxation, compliance, and fair market practices.
Ride-hailing companies in the country are subject to a 15% VAT. Businesses with an annual turnover exceeding $53,031 must register as VAT vendors.
Also, those earning between $2,638 and $53,031 within 12 months can register voluntarily.
Additionally, drivers must pay income tax, with ride-hailing companies responsible for withholding and remitting these taxes on their behalf.
The South African Revenue Service (SARS) has been working to ensure compliance among both ride-hailing companies and their drivers.
However, enforcement has proven challenging, particularly due to the classification of drivers as independent contractors.
This complicates the tracking and collection of taxes, especially as the gig economy continues to expand.
Despite these regulatory challenges, ride-hailing companies have significantly contributed to South Africa’s economy.
In 2023, Uber alone injected around $901 million into the nation’s economy, accounting for 3.5% of the transport sector’s economic output.
In that same year, the broader ride-hailing market in South Africa generated an estimated $318.5 million in revenue, underscoring its role in job creation, local business support, and economic growth.
Uber alone reported that its drivers and delivery couriers earned a combined $121.9 million that year.
As of March 2025, the company had 52,000 drivers across its ride-hailing and Uber Eats divisions, highlighting the sector’s growing impact on employment.
Beyond taxation, the South African government has introduced regulations to ensure fairness in the ride-hailing industry, protecting both drivers and passengers.
These measures aim to safeguard local jobs while ensuring that international companies operate within the country’s legal framework.
Nigeria
In Nigeria, ride-hailing companies are taxed under the VAT system at a rate of 7.5%, with drivers also subject to income tax.
In 2020, Nigeria’s ride-hailing market was valued at approximately $292 million, accounting for about 15% of Africa’s e-hailing revenue.
The sector is also projected to generate a revenue of approximately $303.31 million in 2025.
Over the period from 2025 to 2029, the industry is expected to grow at an annual rate of 11.99%, potentially reaching a market value of $477.11 million by 2029.
The Lagos State Government also introduced a 10% service tax on each ride, along with annual licensing fees, including $16,275 for every 1,001 vehicles in a company’s fleet.
Despite these measures, concerns have been raised regarding the tax compliance of foreign companies like Uber and Bolt.
In December 2021, the Nigerian House of Representatives initiated an investigation into their tax practices.
This investigation was driven by observations that while these companies benefit from public infrastructure, such as roads and security services, their tax contributions appeared insufficient.
Rep. Ganiyu Abiodun highlighted that Uber and Bolt drivers earn between $39.06 and $78.12 weekly, with the companies taking 20% and 25% commissions, respectively.
This raised concerns about whether both the companies and their drivers were remitting taxes adequately.
Despite efforts to enforce compliance, the challenge remains in effectively monitoring transactions and ensuring that both local and foreign companies adhere to tax regulations.
Addressing concerns about potential tax avoidance strategies, such as profit shifting, is essential to safeguarding Nigeria’s tax base and promoting equitable economic development.
Ghana
Ghana, like many other African nations, has also introduced a VAT of 12.5% on ride-hailing services.
In addition to VAT, the Ghana Revenue Authority (GRA) introduced the Vehicle Income Tax (VIT) in January 2024 to formalize the sector and boost tax revenues.
The VIT, a quarterly tax, applies to all commercial vehicle owners, including those operating on ride-hailing platforms.
To ensure compliance, platforms are required to update their systems to verify proof of VIT payment for both new and existing vehicles.
The ride-hailing market in Ghana is projected to reach approximately $6.30 million in 2025, with platforms like Uber, Bolt, and Yango driving significant growth.
While the exact contribution of ride-hailing companies to national revenue is not publicly disclosed, the VIT reflects the government’s intention to harness the sector’s growth for fiscal benefit.
The broader eServices market, which includes ride-hailing, is expected to generate about $304.52 million by 2025, underscoring the sector’s economic significance.
However, enforcing these taxes remains challenging due to the digital nature of ride-hailing services.
The GRA faces difficulties in tracking all transactions, and many drivers remain unaware of their tax obligations.
To address this, the government will need to invest in monitoring systems that ensure both local and foreign companies comply with their tax duties, ensuring a fair contribution to the country’s economy.
Tunisia
Tunisia, like many African countries, has been working to formalize its digital economy, including the taxation of ride-hailing services.
The government currently imposes a 19% VAT on these services, affecting platforms like Uber and Bolt.
In recent years, authorities have introduced stricter tax regulations aimed at capturing revenue from the expanding e-hailing sector.
However, enforcement has proven difficult, largely due to the digital nature of transactions and limited transparency in platform operations.
A recent case has brought attention to the ongoing tensions between regulators and ride-hailing companies.
The Tunisian authorities accused Bolt of tax evasion, money laundering, and operating without the necessary licenses.
They seized $3.8 million from accounts linked to several apps, including Bolt, alleging that the funds had been unlawfully transferred abroad.
Bolt strongly denied the accusations, calling them “completely unfounded” and expressing concern over not being given the opportunity to address the claims through legal channels.
The company maintains that it has operated in accordance with local laws and is committed to compliance.
The government’s response is part of a broader push to tighten regulation of the ride-hailing industry and retain more revenue domestically.
As part of these efforts, Tunisia plans to launch a state-backed ride-hailing app by mid-2025, intended to cap fares, respond to drivers’ demands, and modernize the sector.
Additionally, The 2024 Finance Law also introduces tax reforms, including changes to VAT rates and filing timelines.
This reflects the state’s broader objective to foster fair competition and regulatory compliance across emerging industries.
There is a need for a delicate balance
The rise of ride-hailing in Africa has brought about significant economic benefits, creating thousands of jobs and offering affordable transportation to millions of people.
However, as governments seek to regulate and tax these services, there is a delicate balance to be struck.
Countries must ensure that ride-hailing platforms contribute fairly to their economies, without stifling innovation or discouraging foreign investment.
Tunisia’s decision to suspend Bolt may be seen as a warning shot to foreign companies, but it also raises important questions about the future of the industry.
Will other countries follow suit, creating state-backed platforms to control the market?
Or will the need for competition and innovation ultimately drive governments to find ways to work with foreign companies?
As Africa rides into the future, governments will need to be both creative and pragmatic in how they handle the growing digital economy.
