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Uber was caught in the Australian Government’s crosshairs this afternoon, with the Australian Taxation Office announcing that Uber — and other members of the so-called “sharing economy” — would be charged the 10 per cent Goods and Services Tax (GST).
Uber drivers would be declared as offering a taxi service to customers, meaning they all had to apply for Australian Business Numbers (ABNs) and charge the 10 per cent GST on every ride.
The ride-sharing service issued a statement this morning, saying that it was disappointed by the ATO’s decision to tax the sharing economy:
We were therefore 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 statement goes on to add that it’s “a shame that the government is allowing a handful of bureaucrats to determine public policy for the newly emerging sharing economy,” but its spokespeople didn’t stop there.
AAP is reporting that the ride-sharing company’s head of policy went on TV this afternoon and threatened to challenge the Government’s push to tax Uber in the courts.
“It’s something we are considering,” Brad Kitschke told the ABC.
Whether the Uber policy boffin was shooting his mouth off or hinting at the next step remains to be seen.