Uber is a TAXI service; Company to pay Taxes abroad, Why not Pakistan?

Uber Cab Company to pay taxes

The mighty debate of whether the ride-sharing services like Uber and Careem should pay taxes has been going around in many countries worldwide and it saw a major twist in the story as the Austrailian Court has deemed Uber (drum roll please) A TAXI SERVICE.

Uber doesn’t regard its drivers as employees and thus isn’t considered a taxi service for tax purposes. But the Australian court has reclassified Uber as a taxi service in the region which is bound to pay GST (General Sales Tax). This constitutes the company’s defeat with the Austrailian Taxation Office.

At the end of January, the cab-hailing companies, including Uber and Careem were declared illegal in Punjab as these cab services don’t pay any taxes. They are operating without registering the private cars with any regulatory body and without obtaining fitness certificates/ route permits.

Sindh government also sought legal action against Careem and Uber Taxi services in the province. They also objected that in order for them to operate, the vehicle must be made commercial. and the owners of the vehicles must obtain fitness certificate.

Uber and Careem consider themselves as mobile app company and thus they contest they shouldn’t pay taxes to the government. Also, one major objection that they raise is that as people are taking up ride-sharing as a part time thing, their vehicles shouldn’t be commercialized, which is a shaky reason at best.

The drivers working for Uber and Careem are very capable of making more than 30-40K a month by just driving their car while the invested cars or drivers who only rely on earning through this service can end up with around 70-90K in just one month.

The company has been trying to push back against the way its business has been classified around the world. Last year it also appeared in front of the European Court of Justice and claimed that they are a software company, not a taxi service.

A London court also ruled in Oct last year that Uber drivers should be classified as employees, rather than independent contractors, meaning that they are responsible for providing relevant benefits under work laws.

The cab-hailing companies aren’t banned in Punjab. The CM Shehbaz sharif has formed a four-member committee tasked with bringing Uber, Careem, A-One, etc under the tax net and also to propose a legal framework to govern the mobile based cab companies.

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