Supporting Canadians Who Use Ridesharing
On March 22, the Canadian government announced a new tax policy that makes transportation more expensive. If passed, it impacts over a million Canadians who use Uber, both drivers and riders. This change would drive up costs for Uber riders by up to 15%. It also would create more accounting and tax paperwork for you and all Uber partners.
While it’s still too early to say how this change will affect rider requests and pricing, we’re fully committed to helping ensure consistent earnings for drivers. We’re focused on working with the Government to find a solution that best serves you. In the meantime, remember this proposal has no impact on your tax filing for 2016.
Most small business owners, including people who drive with Uber, do not have to charge sales tax (HST/GST) unless they make more than $30,000 annually. For example, if you work as a photographer in your spare time or occasionally sell a few pieces of furniture on Craigslist, you don’t need to register for an HST/GST number. If your business grows and you make over $30,000 annually, then you’re required to collect and remit HST/GST.
Most Uber partners drive occasionally and never reach the $30,000 threshold. As you know, there are many kinds of drivers. From high school teachers who drive during their summer breaks, to retirees looking to supplement a fixed income, or parents trying to put money away for a family vacation.
This new government policy would mean all Uber partners lose the small business tax break that almost everyone else gets. It means Uber partners would need to collect HST/GST on every trip, starting July 2017.
Meaningful discussion is needed
This announced policy requires meaningful consultation. Without that, it could be voted on without a full understanding of what it might mean for Canadians who use Uber—whether looking to make a few extra dollars driving or using ridesharing to move around their city.
It should be noted that the government could easily meet its stated objective to “level the playing field” by treating taxi drivers like other small business owners, instead of charging everyone more for transportation.
The federal government has demonstrated a commitment to the environment, innovation, and the middle class. We believe that with further discussion we can work on policies that both create tax fairness for taxi and support all the benefits ridesharing brings to riders, drivers and cities.
We want to hear your thoughts about this proposed change and how it would impact you. Send us a note about the new policy here.
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