How the tax system should change to include Australia’s sharing economy

Mr Malone said the government’s consultation had so far not included issues associated with the legal distinction between employees and contractors, proposing a holistic approach to clarify the rules in order to encourage certainty and economic growth.

‘Encourage compliance’

“If a new regime is implemented, such as identity reporting by platforms, then Australian measures should adopt the OECD definition of what constitutes the sharing or ‘gig economy’ to ensure that Australia is not imposing rules based on concepts or definitions that are unique.

“The government should aim to design a fit-for-purpose compliance experience that promotes and encourages self compliance.

“This is preferred rather than placing onerous regulatory burdens on sharing economy platforms or financial institutions, such as imposing periodic reporting requirements of transaction-by-transaction data of all bookings for all participants.”

Calling for effective education measures to help taxpayers, Mr Malone said online marketplaces and the supply of goods should be excluded from any new rules as they fall outside of the OECD definitions for the sharing economy.

Estimates suggest that in New South Wales alone, revenue generated by the sharing economy increased by as much as 68 per cent between 2014-15 and 2015-16, coming as the number of users more than doubled.

‘Mistreating workers’

The Transport Workers’ Union of Australia told the consultation process that wide-scale regulation was needed across the gig economy, covering everything from the right to minimum pay to superannuation, sick leave, unfair dismissal and collective bargaining.

“Tax compliance measures must be a part of push for regulation across the gig economy,” the union said.

Citing underpayment and non-payment of superannuation by delivery service Foodora, which announced its exit from Australia in August 2018, the TWU said large operators could effectively get away with mistreating their workers.

In November, Foodora’s administrators admitted the gig company incorrectly classified thousands of food delivery riders as independent contractors, underpaying workers more than $7.5 million in wages and superannuation.

“The powerful players at the top of supply chains continue to put tremendous economic pressure on workers that operate further down the chain.”

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