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Canada To Tax Ride-Sharing Providers Like Uber (www.cbc.ca)
Canadian Prime Minister Justin Trudeau and his government announced plans to tax ride-sharing providers like Uber for the first time. According to CBC, the latest consumer tax changes included in Wednesday's federal budget "will add to the cost of Uber rides while ending a public-transit credit." The idea behind the decision is to "help level the playing field and create tax fairness." From the report: The proposed levy on Uber and other ride-hailing services would for the first time impose GST/HST on fares, in the same way they are charged on traditional taxi services. The change will broaden the definition of a taxi business to ensure Uber and other web-based ride-hailing services are required to charge and remit GST/HST, adding to the cost of each trip. The effect on federal revenues will be modest, just $3 million in additional revenue in 2017-18, but the budget suggests the measure is to help level the playing field and create tax fairness. The non-refundable public transit tax credit -- a so-called boutique tax credit introduced by the previous Conservative government -- will be phased out on July 1. The credit enabled public transit users to apply 15 per cent of their eligible expenses on monthly passes and other fares toward reducing the amount of tax they owe. Ending that tax break is expected to save Ottawa more than $200 million a year. Of course, Uber Canada isn't so fond of the idea, calling it a "tax on innovation" that would hurt Uber drivers and users. The company said in a statement: "At a time when Canadians spend far too much time stuck in traffic -- and people should be encouraged to leave their cars at home, take public transit, and share rides -- we should be supporting policies that make sustainable transportation more affordable, not more expensive. Federal tax laws already offer small business owners a break on collecting sales tax, but unfairly exclude taxi drivers. The best way to support taxi drivers and level the playing field is to extend the same exemption to them."
There is no "ride sharing", it's ride selling. If you want one of my cookies and I sell it to you, am I sharing it? No.
A car is not an alternative method of transport to a car.
All that solves is a parking issue.
Even worse, using Uber increases congestion. The time an Uber vehicle spends on the road without a client is "congestion overhead" that would not otherwise not occur if the client drove their own car. Uber definitely helps with parking issues but that is about it. One could argue that it helps keep larger vehicles and trucks off the road but I do not know many truck drivers that would use Uber as an alternative to their truck. Some statistics with regards to this would be interesting.
This is a simple extension of existing GST laws. The law in question requires self-employed people or companies to register for a GST number, and to collect GST. Anyone self-employed who makes more than $50,000 MUST do this. Anyone who makes less than this can optionally register and begin charging and remitting GST, but anyone can do it at any income level. So Uber employees have to do this whether they make $50,000 or less, as a self-employed individual within a particular public sector.
This isn't a tax on innovation, this is Uber drivers being forced to charge/remit GST just like any other taxi service. As for the suggestion that Uber somehow saves people from being stuck in traffic or that Uber is somehow a more sustainable traffic option, nice fantasy world they got going there.