The purpose of the exemption was never to let a mega-corporation take the exemption of each employee, multiply it by the number of employees, and pretend that they don't need to pay tax.
What next? A grocery store taking the $30,000 exemption for each employee working for it? A law firm taking a $30,000 exemption for each legal aide working on a case?
Contractors are considered employees in some ways and not in others. This is mainly under labor ("labour", here in Canada) law which is there to protect workers from being exploited by being reclassified as contractors. Like you can't ask people to work in shit conditions just because they are contractors, and such, or deny them a lunch break.
Consumers contract with Uber, and pay Uber. So from what I can see, Uber should be collecting, for itself.
I am an Uber/Lyft user and my life has been drastically improved!
I download the Uber app, Uber finds me a ride, Uber sets the price, Uber charges me, and I pay Uber. Uber should be collecting GST/sales tax. I don't understand how else you could look at it!
Uber is essentially doing the same thing here in Australia and the courts are getting involved to make a ruling.
The intent of the law is pretty clear - serious businesses (That do more then $30,000/year in sales) are expected to pay taxes. Small ones are not - because of the small amount of tax revenue, and the high burden of compliance for individuals.
The cost of compliance for Uber is trivial. It's a bloody app, for Pete's sakes.
This is Canada. I'm sure that's how Uber would like to see it but not everybody agrees:
http://business.financialpost.com/news/transportation/uber-d...
When this sentence is used by the well-connected elite of the best-funded region in the world, somewhere, the world's tiniest orchestra plays a sad tune on the world's tiniest instruments.
Seriously, guys ~~
This is under dispute, and I think you're going to find that governments around the world disagree with you.
Uber is like a builder who hires contractors. The builder's revenue is >30 k CAD therefore they need to collect and remit GST.
If some of the contractors were to make less than 30 k per year, then they don't need to charge GST, regardless of who the builder is or the size of the projects they work on.
The "end user", the person paying for the house, deals with the builder, hence pays GST.
If you say you'll build me a website for $100, and I in turn contract that out to some guy in India, I'm still required to charge you $100 + $5 GST. The fact that I didn't use an employee to provide the service is of no issue.
It's right to close the loophole that really should never have existed in the first place, if not for industry lobbyists.
http://www.newswire.ca/news-releases/statement-from-uber-can...
One interesting note about the press release to the Canadian newswire service, it highlights that Uber was confounded by Canadian Garret Camp.
This is set to go live on July 1st so I guess you can watch the data from that point on to see if it has any effect.
> The budget statement estimates the change will raise C$3 million in new revenue in the 2017 budget year, rising to C$5 million in the next few years.
So this isn't really about raising money as $3 million is figuratively a rounding error.
s/confounded/co-founded/cg
Sorry for the nit-pick, but in this case the word confounded had me genuinely confused about what this special interest group, Canadian Garret Camp, is (are they angel investors? some sort of VC incubator? a front-group for taxi companies?), and why they were lobbying for removing Uber's GST exemption.
Instead of making it harder to be an Uber/Lyft to match Taxis, why not make it easier to be a taxi? Driving someone around shouldn't be so complicated.
Regulation, when necessary, is good... but most of what I see around taxi regulation is just money gouging on the part of the state.
The NZTA are prosecuting because it turns out that, surprise surprise, Uber are hiring drivers with serious criminal records or who are medically unsafe to drive.
Personal safety gets involved, big time, when driving someone around.
If I give you a ride to work, for free --- then give you a ride to work, but you pay me, what is the functional difference requiring more regulation on the second part?
Is your safety affected any different? Aside from the basic protections built in to any business when it comes to collecting money, etc, what extra rules need to be in place.
From a purely pragmatic standpoint, what is different about the experience that requires all the extra crap?
For example, in many cities where they were losing the legal fight, Uber offered free rides... and were legally allowed to do so, because they weren't charging the customer. Explain to me what was different in that scenario that made it any safer for the passengers?
Until someone gets driven 60 miles out of town on the way to the airport and left there unless they have a "special" fee...
It's almost as if these regulations were put in place for a reason.
Taking someone somewhere against their will is already illegal, which of these extra laws (and taxes) prevent that?
The result would be the same in either case - the driver would be held accountable for, basically, kidnapping and extortion, and you'll be left either short more money or stranded 60 miles out of town. A regulation in place isnt going to prevent someone from doing that. Regulations would have no impact on that case.
The Canadian government realized it could increase taxes by appealing to moral outrage, with terms lime "tax advantage" and "loophole". End the tax advantage by lowering taxes and reducing the size of government? Out of the question.
In addition, my understanding (not a tax/law person) is that the 30k$ would be for the whole fare, not the driver's cut.
GST rate is 5%... But provincial sales tax could apply, at least in provinces where there is HST (Harmonized Sales Tax, administered by fed gov, divided with province.) HST varies from 13% to 15%. I wonder if we'll see provinces going after the drivers for back taxes. Revenue Quebec is notoriously aggressive in going after people for sales tax.
Sounds like Uber needs to update their app.
> I wonder if we'll see provinces going after the drivers for back taxes.
I'm sure Uber will do the responsible thing, stand by its drivers, and make them whole in the case that they are billed for back-taxes.
Particularly because Uber-like apps are becoming important to public transportation infrastructure. Additionally, taxi revenue coming from tourism remains in the hands of Canadian taxi companies as opposed to Uber resulting in a net positive flow of money into the country.
http://www.itbusiness.ca/news/canadian-alternative-to-uber-l...
Sadly it doesn't address any of the problems with cabs in Toronto.
1. Cabs won't take credit cards by claiming "the machine is broken" when it's not, presumably so that they can avoid reporting tips or fees, or they might just skim your card.
2. Cabs are too expensive.
3. Cabs might not even take you if they figure the ride isn't worth it.
This app doesn't allow you to pay, so doesn't help 1. It actually make 2 worse by charging you $2 just to "hail" a cab with it. I mean, seriously? And it doesn't help with 3 either.
It's amazing and would be so illegal on so many levels in Canada (where I spend $1000/mo on transportation).
1) Their app 2) The reliability of getting car with them vs. waiting for a cab. 3) Their vehicles are much, much, much nicer than cabs in my area. 4) The purchase experience.
Have you ever asked yourself how they do that? It's not like taxi drivers are fabulously wealthy.
They don't even always have a price advantage anymore, especially if there's a surge. I needed a cab from Chicago Midway to my hotel last night, Uber's upfront price was $48 (and an eight minute wait), a regular taxi was $40 (including 15% tip) and no wait. I took the latter.
Lower fares mean more revenue for drivers and Uber and thus more income taxes collected. Removing taxes from goods, means lower prices which means you sell more and then generate more tax revenue. Laffer Curve 101.
Because consumption taxes are the most efficient form of taxation. You want a private chauffeur? Pay up.
>Lower fares mean more revenue for drivers and Uber
Huh? Only if the driver is working a lot harder.
Uber should fail on both of those counts, but instead the law is changing to end that exemption. This appears unfortunate to me as we could use continued innovation in the ride sharing space.
https://news.fastcompany.com/investors-are-paying-2-billion-...
