NSW Taxi Council Welcomes ATO Ruling on GST and Ridesharing

20 May 2015 | NSW Taxi Council

The NSW Taxi Council today welcomed the Australian Tax Office (ATO) ruling that drivers for UberX will be forced to fulfil their tax obligations by paying GST.

The NSW Taxi Council advised however, that there are still many more issues to be addressed in relation to illegal ridesharing.

The decision by the ATO is a clear recognition that the law should be applied equally to all.

The NSW Taxi and Hire Car industries have been required to comply with this law since the introduction of GST in 2000 and there is no valid reason why any organisation providing these type of transport services should be exempt. 

NSW Taxi Council CEO Roy Wakelin-King said “our industry believes that it is only fair and equitable that we contribute to Government tax revenue. It is important that we pay our fair share.”

“This decision is a step in the right direction in moving towards a level playing field, but there is much more to be done to address the issue of illegal ridesharing services, including proper licence provisions and relevant authorisations,” Mr Wakelin-King said.

“There needs to be compliance with regulations and standards that have been established to protect the public interest.

“The taxi industry is committed to driver training and customer service standards, and part of this training includes educating drivers on their tax obligations and helping them to comply with all necessary legal requirements.

“As part of first year training, new taxi drivers are required to attend a presentation from ATO representatives where they are guided through tax processes.

“As an industry we are proud of our record of paying our way and contributing our fair share of tax and there’s no credible reason why ridesharing companies should be opposing this decision,” Mr Wakelin-King said.

 

Additional information from the ATO:

For taxi drivers, including chauffeur driven limousines and hire cars, there is no registration turnover threshold for GST. This means that anyone who carries on an enterprise of driving a taxi, chauffeur driven limousine or hire car, must register for GST, unless they are an employee for pay as you go withholding (PAYG withholding) purposes.

The government chose to apply compulsory registration of taxi drivers for several reasons including:

  • To avoid the confusion that would be created if some taxis had to charge GST and others did not 
  • Avoiding the added problem that would arise if a passenger was using a taxi for a business trip (creditable acquisition). In this instance, the passenger would want to be able to claim an input tax credit for the GST included in the fare. 
  • Meter rates are set by each state authority and after 1 July 2000 all meters were adjusted to reflect the GST. If some drivers were registered and others were not, all would be collecting the higher rate. This would disadvantage drivers who had to be registered if the ordinary registration turnover threshold applied.