Ride-sharing company Uber has increased prices of its UberX service by 10 per cent after the Australian Taxation Office announced that drivers must begin paying GST from August 1.
In a statement, Uber announced that it had begrudgingly increased the price of its UberX service in line with the ATO’s new ruling, but confirmed that it was also challenging its position in the Federal Court of Australia.
Uber claims the new regulations put its drivers in a different position to the likes of truck drivers, bike couriers and Airbnb hosts, who typically do not have to collect GST until they reach $75,000 per year in turnover.
“To be very clear, Uber believes that all of its driver partners should pay their appropriate share of tax. However, we believe driver partners and riders are being unfairly singled out, and so Uber is challenging the ATO’s position in the Federal Court of Australia,” the statement reads.
Uber says GST is not a tax on Uber but an additional tax on Australians who earn a flexible income by sharing rides through Uber, and also means that drivers who share just a few rides each month may hit red tape such as being required to file quarterly business activity statements.
“We feel that the position taken by the ATO jeopardises this flexible income, harms job creation, and is guidance that should not have been issued while a comprehensive federal government tax review is underway.”
ATO deputy commissioner James O’Halloran addressed the issue recently, telling journalists that UberX drivers fall into the same category as taxi drivers and are required to pay GST on every dollar they earn.
“Affected drivers must register for GST, charge GST on the full fare, lodge business activity statements and report the income in their tax returns,” O’Halloran said.
“The existing law applies equally whether the buyer or seller come together at a bricks and mortar business or via a mobile phone app or a website.”
Uber claims that, despite the changes, the efficiencies of ride-sharing makes UberX between 25-35 per cent cheaper on average than a taxi in Australia.