Regular Uber users take note – from August this year, you may find yourself paying more for your rides, thanks to a recent decision by the good people at the Australian Taxation Office.
Since Uber launched in Australia, there has been a good deal of debate as to whether it constitutes a ride sharing service, or whether it’s actual taxi travel, which would attract GST.
Per reports today in Fairfax, the Tax Office have come down in favour of the latter, meaning that Uber drivers across the country, regardless of their turnover, will need to register for GST by August 1.
“Affected drivers must register for GST, charge GST on the full fare, lodge business activity statements and report the income in their tax returns,” James O’Halloran of the ATO said in a statement.
Uber have issued a statement in response, and they’re not happy:
We [are] disappointed that the ATO has taken it upon itself to dictate government policy for the sharing economy by imposing a flawed interpretation of a law that was introduced in the 1990s upon participants of a new business model that is only one year old.Today’s decision by the ATO is not a tax on Uber but rather, impacts the over 9,000 ordinary Australians who drive on the uberX platform.
These are 9,000 individuals who will now be caught up in red tape before they even accept their first ride, and will then be hit with a tax on their very first dollar earned, unlike like truck drivers, painters, online sellers, gardeners, other sharing economy participants, and every other small business who do not have to collect GST until their business reaches $75,000 p.a. in turnover. The typical uberX partner in Australia works for around 20 hours a week and takes home around $30,000 p.a. – well under the government’s threshold for GST.
The company’s usual strategy of sending kittens to generate good will may yet win the ATO over – guess we’ll see.
In related news concerning stuff for which you’ll now pay more, Treasurer Joe Hockey recently announced what has been called a “Netflix tax”, which will slap GST on all paid digital downloads from overseas corporations, on July 1, 2017.
Image via Uber