Yesterday the Australian government announced that Uber drivers must apply for an ABN (Australian Business Number) and charge 10 per cent GST (Goods & Services Tax).
The Australian Tax Office (ATO) has given Uber drivers two and a half months to start paying GST.
In response, the company released a statement.
.......................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 the 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 the 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 current penalties are $220 for non-lodgement of a BAS and fines apply for non-payment of outstanding GST on supplies already made.
Yesterday, the company's head of policy Brad Kitschke threatened to challenge the government's decision in the courts. "It's something we are considering" he said.