After this week’s federal budget revealed ride-sharing services would have to collect GST just as taxis do, the head of Uber Canada was quick to urge Ottawa to rethink the newly unveiled policy.
But Internet law expert Michael Geist took aim at Uber Canada country manager Ian Black’s description of the policy change as a “tax on innovation.”
“Uber already collects and remits sales taxes in some Canadian jurisdictions. For example, the Uber page for drivers in Montreal explains that drivers are required to obtain sales tax registration numbers,” Geist, the Canada research chairman in Internet and e-commerce law at the University of Ottawa, wrote in his blog Thursday (March 23).
“When sales tax questions have been raised elsewhere, Uber has also claimed that drivers are expected to collect GST/HST (which is totally unrealistic given that it uses cashless transactions).”
Black issued a statement earlier in the day saying that both Uber drivers and taxi drivers should be exempt from paying GST, and made comparisons to the relief the government offers small business owners.
Uber does not consider its drivers to be employees. Instead, the company that has been valued as high as US$66 billion considers drivers to be contractors.
“This new tax on innovation would hurt over a million Canadians who use ridesharing to earn income and get around their cities,” Black said in a statement.
“Considering how many Canadians this tax will directly impact, we ask for meaningful consultation on this proposal and hope to work with the Government on smart solutions that support innovation.”