Opinion: Uber GST ruling helps create a level paying field for taxis
Campbell Newman, The Courier-Mail
February 22, 2017 12:00am
AS MANY people in the taxi industry would know, I have been very disappointed at the way that state and territory governments across the nation have treated the taxi industry as they grappled with the arrival of Uber.
My firm view continues to be that the new arrival, Uber, has not played by the rules; leading to a situation where governments have rolled over with so-called reforms that don’t deliver a level playing field between taxis and Uber, or adequate compensation — especially given that governments have been quite happy to regulate the industry in the past and collect large licence fees.
The recent decision of the Federal Court has gone some way to addressing the stacked deck that has worked against the taxi industry by requiring Uber drivers to remit GST to the Australian Taxation Office.
Uber tried to make an argument that their drivers weren’t providing taxi travel because, ironically, they weren’t licensed in any state or territory.
Under the GST law, cabs have to charge and remit GST and if Uber drivers don’t, that’s an immediate price disadvantage of 10 per cent for the cab.
This is an important win for the community who rely on the GST to fund essential services provided by schools, hospitals, ambulances, police and fireys across Australia.
Uber, who structure their finances via offshore corporations, have an obligation to all Australians to pay their fair share — this decision is a key step towards ensuring that they do so.
While the decision is a win for Australians, who expect companies to pay their way, it’s also a big win for fairness in the way that cabs are treated.
I believe that the decision will also see:
● Uber drivers having to properly gear up as businesses, registering for the GST, running proper books of account and needing to engage professional accounting services. Yes, there are costs associated with this and they are no different to the overheads of the taxi companies to run their operations in compliance with state and federal law.
● The ATO running spot audits of Uber drivers and launching a number of high profile prosecutions for noncompliance. One thing about the ATO is that they have the resources to relentlessly pursue Uber drivers until they are satisfied that people have got the message.
● A realisation among taxi drivers that the cab companies’ arrangements actually assist them to deal with a range of compliance issues (like the GST) and provide a level of protection against prosecution.
My final point is that, if the Federal Court gets that Uber are providing taxi travel for the purposes of the GST law, then state and territory governments should stop pretending that Uber are somehow different from cabs.
They need therefore to revisit their so-called reforms and create a true level playing field for taxis and Uber drivers.
In the interest of full disclosure, Mr Newman acknowledges that Neill Ford, the Managing Director of Yellow Cabs, is a personal friend and supporter from his days in public life.
Campbell Newman is the former premier of Queensland and now Director, Araluen Capital Pty Ltd.