A tax on a tax

This morning, TAFKAS had the misfortune of crashing his 2 wheeled chariot on his regular excursion.  This necessitated an Uber ride home for TAFKAS and his damaged steed.

Just looking at his receipt, TAFKAS noticed 2 interesting charges:

  • NSW Government Transport Levy; and
  • NSW CTP Charge

It should be evident that TAFKAS is in NSW, but he does not want this thread to be about these particular NSW Government charges.

What is interesting though is that TAFKAS was charged GST on both these pseudo taxes.  And that appears to be a tax on a tax.

What taxable supply did the NSW government provide to TAFKAS through these charges that warranted the charging of GST?

There may be other factors at play, but TAFKAS can see 2 possible scenarios:

  • The NSW government is charging TAFKAS a goods, services and tax tax as a means to mask the true amount of their pseudo tax; or
  • Uber is ripping people off and taking a fee and calling it GST.

Any thoughts out there in Cat land?

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36 Responses to A tax on a tax

  1. stackja

    I use a taxi. And support small business.

  2. Uber drivers are also small businesses. But there weren’t too many taxis about at 530am in the boondocks where Tafkas rode.

  3. shady

    What is NSW CPT Charge? I’m from Victoria so that means I’m a bit slow and don’t vote Labor or Greens.

  4. Robbo

    You have been ripped off. The NSW government is involved so no surprises there.

  5. Roger

    There may be other factors at play, but TAFKAS can see 2 possible scenarios

    The second scenario would be illegal.

    The first is unethical.

    To add insult to injury they’ve also rounded the GST up.

  6. stackja

    Uber is not a small business.

  7. NoFixedAddress

    Got to keep those essential ‘Public Servants’ fed somehow. After all they are the one’s that will be borrowing the money from the Banks to buy the houses and pay the Stamp Duty and interest that is booming the economy.

    Almost like the Cat/Rat farm. Pensioners can be supplied with free Cat skin coats to keep them warm while the free energy powers their ABC box where they find out about the benefits they receive from living in enlightened times.

  8. Biota

    Did TAFKAS lose some skin as well as tax?

  9. Bruce of Newcastle

    Tax on a tax on a tax, since the income the driver is getting is subject to income tax also.
    Otherwise the GST would be only on the after-tax component he gets.
    I’m sad for your poor dented chariot.
    Hope no human injuries!

  10. Amadeus

    I’m more inclined towards a ripoff by Uber.

    Until someone with a greater insight into the unregulated/sector of our public transport system can disabuse, I would contend that Uber and their ilk are leeches and their riff-raff coterie posing as “transport service providers” are now increasing clogging our roads while contributing [email protected]#$all in taxation and avoiding the same levels of scrutiny imposed on registered “transport service providers”. Talk about a black market – Treasury as usual asleep at the wheel.

    Sorry TAFKAS but Uber-types IMO are not in the same class as small business owners. They are merely fodder for the off-shore owners ripping off Australian small business and avoiding Australian taxation Regarding the latter, I recognise that Uber is no Robinson Crusoe. But it is interesting to note that the accommodation sector is increasingly bowing out of using booking leeches like booking.com/trivago/wotif/etc., and/or severely limiting the number of rooms they will offer to these leeches.
    I would be very pleased to see the Uber riff-raff off our roads.

  11. Chris M

    Buy a unicycle Takfas.

  12. Thank you for your concern. TAFKAS is sore but will survive. Waiting for the chariot vet to determine whether the trusty steed needs to be put down. The brand new MIPS helmet suffered a terminal dent, the fancy rear derailleur is no longer fancy and the handle bars won’t handle much any longer.

  13. Rafe Champion

    Commiserations!

  14. stackja

    A friend is a cab driver, it’s his life.
    He works hard.
    Cabcharge was allowed by Nev.

  15. It appears that there’s a portion of the Uber operations cost that takes into account payment of transport and accident levies (which require GST to be added) and, since an Uber driver uses their own vehicle, some calculated portion of these levies is a business cost and paid for by the customer. Seems legit.

  16. I use a taxi. And support small business.

    There’s no way I’d support those stinky cabs in Melbourne. Ever been in one? Good luck finding a driver whose face matches the photo in the ID .

  17. stackja

    bemused – I only know Sydney. Dan makes the rules in Victoria.

  18. Dan makes the rules in Victoria.

    Kennett changed the taxi scene completely when in power, forced all cab drivers to (literally) clean up their act and all cabs became yellow and rules were enforced. Cabs were quite good after that, but once Labor got in power, the taxi industry became the toilet that it is today.

    Those who want a cab to arrive on time, where the driver knows where they are going, where the cab has working aircon/heating, where the passenger wants their suit to remain clean and not end up smelling like someone’s reheated spicy meal, use chauffeur cars or independent drivers who operate yellow cabs.

  19. Robbo

    Uber rips off its drivers and as an occasional user I always ask my driver how he is faring and about 90 percent tell me they are struggling to make a decent living out of driving for Uber. The big winners are the Uber company, the ATO, fuel retailers and, if the driver bothers, car servicing businesses. Uber drivers come a very bad last.

  20. Gavin R Putland

    Yes, that’s bad, but so what? The only taxes that are guaranteed not to be taxes on tax are taxes on economic rent – because all other taxes cut into what is left over as economic rent. But I wouldn’t expect any support for that solution.

  21. Rayvic

    “The big winners are the Uber company, the ATO, fuel retailers and, if the driver bothers, car servicing businesses. Uber drivers come a very bad last.”

    Does anyone in Cat land know how much, if any, tax the ATO collected from Uber in the past few years?

  22. Charles Rasp

    No-one is forced to drive for Uber. They can even chooses to drive for another ride-share company if they don’t like Uber (and almost all drivers don’t like Uber) …. DiDi and Ola come to mind. They certainly are small businesses, although the margins are very slim, like many service industries.
    Here in Perth anything is better than the lousy, expensive, taxi service, and unfortunately we now must pay a 10% to levy for “taxi restructuring”. Yes, GST is added to the levy, and to the “booking fee” Uber has snuck in while I wasn’t looking. But of my last ten or so journeys, probably eight didn’t charge GST because they aren’t registered (earn <$75kpa). And I usually tip to help the good drivers out (no GST on that I hope).
    Yes Big Uber sucks, but the service is good and safe, and pretty well policed by Uber for service, cleanliness etc. That's free enterprise for you ….
    I use Uber a lot because it's cheap, efficient, secure, and clean, and I don't have to rat around for cash or a credit card to pay.

  23. Siegfried

    Amadeus… I am an occasional Uber driver in Melbourne:. You obviously know nothing about the share ride industry … so my response is simple.. don’t use it and should you ever come to Melbourne.. please don’t, we have enough trouble in Danistan…. we don’t need another aresehole here.

  24. Rockdoctor

    Transport charge is another Ansett style Levy to compensate buying back taxi plates that all states agreed to. I saw it on a taxi receipt to Melbourne Airport last year and again in December on a NSW taxi receipt. I was like you till I researched it.

    The CTP, Compulsory Third Party??? That seems unique to Uber or new…

  25. Harpo of Wolli Creek

    I drove a taxi in Sydney for several years and then when Uber came along I drove for Uber. In virtually all respects Uber was a much better way to earn a dollar. I could choose my own hours, my fixed overheads were minimal meaning I was not forced to work 11-12 hour shifts and I could drive my own comfortable, well maintained vehicle rather than some piece of junk from the taxi base. I netted about the same money on an hourly basis but the downside with Uber was that there were no cash takings. The other mild downside with Uber was the ratings system which compelled me to be polite to super entitled millenials more often than I would like.

  26. Harpo of Wolli Creek

    Also don’t kmow how they fare in Australia but I believe Uber’s world wide losses so far are about US$30 billion so they don’t pay much income tax.

  27. Rockdoctor

    FMD, the CTP thing actually is insurance I kid you not.

    https://help.uber.com/driving-and-delivering/article/ctp-insurance-charge-?nodeId=2ed52b16-93a0-4b29-a859-1808ebf33dd9

    So the Uber Driver would already pay CTP to a provider at a business rate on their cars provided they were declaring the vehicle was also being used for non-private use. So then this is skimmed by the NSW government for what? Which insurer does it go to? Why would there be any need when the drivers car would already be covered? Looks like a sneaky dishonest tax. So many questions…

  28. Mark

    I think the issue is more about labelling of those charges. Both of those taxes are levied on the driver, not the passenger. As such, the charges on the bill are a charge by uber to defray the costs of these taxes. Since it is a charge by a company, you have to pay GST on that amount. The government would probably prefer the charges to be hidden and rolled into the fare.

    I suspect it is a bit of a statement by Uber, as there aren’t charges for Rego, non-compulsory insurance, etc

  29. duncanm

    why is there a CPT surcharge?

    The CPT is paid with rego.. what’ special about Uber they need to pay more?

  30. Woolfe

    Yea the levy is to buy taxi plates back which will never happen and end up permanent. I will never ever use a taxi again if I can help it after the crap service we have endured when they had a monopoly.

    Most drivers have 3 apps so you can get the same driver from uber, Ola and DiDi.

    Think drivers get most from ola and didi but personally won’t use didi now as it is chinese owned, think ola is Indian?

  31. Woolfe

    Oh and the government have a special dispensation where uber etc still charge gst even if they earn under gst threshold

  32. Spurgeon Monkfish III

    I caught an Uber home on Friday night and just checked the bill – no GST. Around $20 cheaper than a cab as well.

    The most obvious and egregious tax on a tax I can think of is the GST on petrol excise.

  33. Craig

    Drive Uber Friday and Saturday nights and Uber makes you pay GST on total wages earned, pre-commission charge amount. Uber should be the paying GST on the commission they charge and they don’t, so the driver has to pay GST and tax from their modified earnings after commission is taken out!

    But, my choice to drive, my car, my comfort and its safe, clean and reliable.

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