Australian Federal Court in Sydney ruled on Thursday Feb, 16 to categorize Uber as a taxi service provider. Therefore, Uber driver must pay the Goods and Services Tax (GST).
Judge John Griffiths in his court ruling said that he found Uber can be designated as taxi service as reported by The Guardian. For that reason, Uber driver is the subject to GST. Judge Griffiths also agreed with the definition of taxi service provided by the Australian Taxation Office (ATO).
“The ordinary meaning of the word ‘taxi’ is a vehicle available for hire by the public," Judge Griffiths wrote in his court ruling, He described the court definition of taxi service. He later added, "and which transports a passenger at his or her direction for the payment of a fare,”
For 18-months, Uber has engaged in a legal battle with the ATO in an attempt to exempt its drivers for paying taxes as reported by ABC . However, the ATO ruled in August 2015 that all Uber drivers must register for GST. That includes the drivers that earn less than $75,000 per year, a treshold for small business income.
In respond to the ATO ruled in 2015, Uber raise its price by 10 percent and filed complaint to the federal court. In its legal argument, Uber insisted that its driver partnerss could not be categorized as taxi drivers, because they were unable to use taxi status. Furthermore Uber drivers could not pickup passenger on the roadside and accept cash payment.
The court ruling handed the defeat for Uber that expressed disappointment in the company’s statement. On the other hand, the ATO and the New South Wales Taxi Council welcomed the decision.
Governments around the world faced a confusion with the Uber status and cateogory. The company insisted that it is a software company that provide ride sharing application, but its driver also received payment from the ride sharing service. Previous legal case occured in the European Court of Justice and the United Kingdom last year.
Watch the introduction of its service in Australia from Uber below:
