Australian Tax Office cracks down on ride-hailing drivers from uberX
With the growth of imitation taxi services across Australia like uberX, the Australian Tax Office has announced that drivers on ride-hailing platforms will now have to declare their earnings and pay GST.
UberX works just like any other peer to peer platform, by removing the middleman which in this case is the taxis and connecting everyday drivers with riders. The everyday drivers earn some pocket money on the side and the riders benefit from lower fares by simply using the Uber app to book a driver near them.
However, as more passengers opt for this cheaper alternative, the taxi industry has said it has been negatively affected. The Australian Taxi Industry Association wrote to the Board of Taxation a year ago, complaining about how taxi drivers have to register for GST and declare their earnings for income tax purpose but ride-hailing drivers do not.
While the Australian Tax Office has taken action and said drivers on these ride hailing platforms will now have to pay GST, ATIA CEO Blair Davies wants the ATO to take things a step further and go after the big fish as well Uber, which is currently valued at more than AU$50 billion and based in San Francisco.
“Uber is a huge private company that has come to Australia for one purpose- to make money. It’s completely reasonable to say to Uber then, that it should 'pay its own way', and that means pay tax on every dollar of profit generated by rides brokered in Australia.”
"The ATO needs to urgently close each and every one of the loopholes that allow local operations to use overseas holding companies to give them free rides paid for by Australian taxpayers."