The Australian Tax Office is forcing Uber drivers to register for and pay GST from 1 August, but have not imposed the same regulations for Airbnb users, sparking debate across the car sharing community.
Uber has hit back against the decision, saying it will impact on job growth and the possibility of a 10% increase in rates, per a report in SMH today.
“This is not a tax on Uber but rather, impacts the over 9,000 ordinary Australians who drive on the uberX platform,” Uber’s general manager in Australia David Rohrsheim told the paper.
“The ATO’s decision raises barriers to entry that disproportionately affect those who would be otherwise unemployed or underemployed and make it unduly difficult for those people to earn an income when they need it most.”
Uber claims drivers will be caught up in “red tape” and the new law was unlike “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 per annum in turnover”.
According to the ATO, properties registered on Airbnb in Australia will be exempt from paying GST as they are not running a bed and breakfast business, but instead renting our properties for small durations, however they will have to declare any rental income on tax returns. Around 35,000 properties have been rented out in Australia.
“It provides clarity for our hosts across the country,” Airbnb’s Australian general manager Sam McDonagh said.
“It’s another signal that the sharing economy is here to stay in Australia.”
Rohrsheim told the paper the typical uberX partner worked for around 20 hours a week and took home around $30,000 a year in pay, well under the government’s threshold for GST.
“Ride sharing is about having flexible income opportunities for those who might need it at different times in their lives,” he said.
“Many driver partners are parents, retirees, or students looking for flexible work around their other commitments. Others use the platform for a finite period, such as saving for a wedding or house deposit. Many others have been unemployed and need a quick, safe and secure way to earn an income between jobs.”
Rival companies however are pleased with the ATO’s decision claiming it evens the playing field between local and overseas market participants who have been able to benefit from avoiding GST.
The ATO decision also sparked debate on a ministerial level for a need to formulate distinct regulations on a growing “sharing economy”.
“Internationally, some authorities have ruled that sharing economy apps like Uber represent a different type of service which requires a distinct regulatory approach,” Shadow assistant treasurer Andrew Leigh told the SMH.
“The government needs to pull its head out of the 19th century and start showing some vision and leadership on the sharing economy.”