Taxing rides: BIR targets Uber
Uber rides may soon become less convenient for the public as tax authorities plan to require the issuance of receipts—a rule ignored by many taxi operators.
Bureau of Internal Revenue (BIR) Deputy Commissioner Nelson Aspe said new guidelines would be issued to spell out the tax responsibilities of all parties in the Uber system.
Apart from the issuance of receipts, the BIR said it expected owners of cars used for Uber rides to file tax returns. Uber drivers who don’t own the cars they use will also be considered employees, hence appropriate taxes should be withheld from their salaries.
Uber rides will also be subjected to value-added tax (VAT), which will add 12 percent to total costs. Aspe said the BIR would charge it retroactively.
“All of these taxes are in the present law,” Aspe told reporters at the sidelines of a financial services forum hosted by accounting firm Punongbayan & Araullo. “We’re telling everyone what the law provides… It’s just a reiteration of what they should pay.”
Uber drivers who own the cars they use would have to issue receipts as self-employed individuals, like doctors and lawyers. Uber drivers who work for car owners, meanwhile, should issue receipts on behalf of their employers.
Aspe said BIR would dig through information from credit card companies, which are required to make regular reports to the government on all transactions. This will ensure that the tax liabilities of drivers, owners and Uber itself are computed accurately. Uber passengers are charged online using their credit card information.
The same rules will apply to other ride-sharing services like GrabTaxi, which offers a similar service called GrabCar, the revenue official added. Unlike Uber, however, GrabTaxi’s business is entirely cash-based, which, according to Aspe, is more difficult to track.
The guidelines on Uber rides, which Aspe said would not create new rules but define how existing laws should be applied, would be issued before the end of the year.
The requirement for receipts is the latest legal hoop faced by Uber and other ride-sharing service providers. Earlier this year, the Philippines became the first country in the world to issue formal regulations for ride-sharing services, which allow passengers to book rides using smart phone apps.
Uber vehicle owners and drivers were required to get licenses from the Land Transportation Franchising and Regulatory Board (LTFRB), much like regular taxis. Uber’s accreditation as a Transport Network Company was approved in August.
