Anxiety over Uber’s tax position

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    … As cabbies, tax campaigner urge GRA action

    By Ernest KISSIEDU

    A group of taxi drivers is on a path to assist the taxman – Ghana Revenue Authority – to boost revenue streams, plug revenue loopholes and leakages and combat tax evasion.

    Their campaign could lead the taxman to rake in a few thousands from the app-based driver service, Uber.

    Uber, which does not own cars, engages in partnerships with non-commercial car owners to offer charter services, pay the drivers on weekly basis and takes a commission from the driver’s sales.

    The fares are calculated per kilometre and are fixed and cannot be bargained. Drivers earn 75 per cent of the charge on each trip whilst Uber takes 25 per cent.

    Instructively, Uber is said not to be paying tax on the revenues earned by and the driver, an allegation that the Ghana Revenue Authority (GRA) has neither confirmed nor denied.

    This is where some regular taxi drivers feel cheated because even though they purportedly make the same amount of sales as the Uber drivers, they pay the quarterly vehicle income tax while Uber does not.

    The Commercial Taxi Drivers Association in Greater Accra believes that Uber is illegally commercializing private cars without paying taxes to the appropriate authorities.

    Those to blame, according to the drivers, are the Ghana Revenue Authority (GRA), Driver and Vehicle Licensing Authority (DVLA), and the Transport Ministry who have allowed the app-based taxi booking service to eat away their market without complying with tax laws.

    Besides, the association blames the Motor Transport and Traffic Division (MTTD) of the Ghana Police Service for not seriously enforcing laws aimed at assuring fair competition between private and taxi operators.

     

    GHC5,000 unpaid tax

    The driver association is not against Uber’s low-cost which connects passengers with non-commercial drivers. Instead, it is perturbed by Uber’s avoidance of tax and non-compliance with all commercial drivers’ guidelines and laws.

    Taxi operators pay quarterly vehicle income tax of GHC12.00, which translates to GHC4.00 a month.

    For a commercial taxi driver, the daily sales is GHC50.00, which aggregates to GHC1,500.

    The math for Uber drivers’ sales is the same. The company has an understanding with the drivers and sets targets of a minimum of GHC1,500 per month. The Uber driver is expected to make that sale for a month and any additional money made on-top of the targeted GHC1,500 automatically goes to the driver.

    Aside that, the Uber driver is paid by the company from the target the driver makes.

    In none of these cases does Uber pay tax.

    Assuming Uber were to be taxed GHC4 per month for each of the about 100 driver partners in Accra, the GRA could be collecting GHC4,800 a year in vehicle income tax.

    This is where the commercial taxi drivers feel cheated.

    Add to it the fact that taxi drivers perceive that their revenues have dropped due to the rise in ride-hailing apps. Some have estimated their losses to be between 20 and 30 per cent.

     

    Uber must pay

    Last May, General Manager for Uber Sub-Saharan Africa, Alon Lits at a press conference in Accra, debunked the perception that Uber does not pay taxes in the country.

    “We have met all the necessary regulations and compliances we ought to before operating in Ghana,” he insisted.

    But according to Ato Annobil, spokesperson for the Commercial Taxi Drivers Association in Greater Accra, “We are calling for an end to non-taxi services like Uber and other ride-hailing apps that allow users (passengers) to book rides with drivers in non-commercial vehicles.”

    “The rise of apps like Uber, has dramatically put taxis and private drivers in more direct competition with one another.

    “All we want is for Uber cars to be identified with commercial number plates; pay commercial roadworthy charges and have their cars embossed with their respective District Assembly Identification,” Annobil explained.

    Meanwhile, Chairman of the Tax Justice Coalition-Ghana, Mr Vitus Adaboo Azeem, has urged the GRA to ensure that it captures Uber driver partners for taxation.

    “If they don’t (pay tax), GRA can follow them to pay. Otherwise they will tell Uber to take a certain percentage of the income that the drivers are taking as tax and pay it to GRA. But it is not enough to say that because they are connecting the cars with passengers, they shouldn’t pay tax. They are not doing it for free.”

    Mr. Azeem said “…The issue is simple! Anybody who is earning an income in Ghana is supposed to pay taxes unless the income is less than the threshold. The income tax is graduated and there is a certain annual income below which you don’t pay tax,” he indicated.

    For Mr. Azeem, if Uber itself is earning commission from the drivers, they should pay tax on the commission that they earn; and then also they should take a component of what the drivers earn as tax and pay on their behalf just like businesses will pay withholding taxes on behalf of service providers.

    A source at the Ghana Revenue Authority (GRA) told The Business Day that Uber must pay the necessary taxes if indeed they are not already doing that.

    “Once you are providing commercialized services, there is the need for you to pay the appropriate taxes. We need to look into the matter,” the source stressed.

    But when Business Day contacted the Communications and Public Affairs section (CPA) of the GRA, they declined to comment.

     

    Uber elsewhere

    Uber is an international transport technology operator who has quickly expanded across parts of Africa, where it is seen by those signing up as drivers or “partners” in the Uber lingo — as a rare job opportunity on a continent with stubbornly high levels of unemployment.

    But the service has stirred debate over how low fares should go, and the company has faced a series of strikes from South Africa to Lagos.

    Now operating in over 12 cities in some six countries in the Sub-region, Uber has a driver partner population of more than twenty thousand.

    Less than a fortnight ago, Uber formally extended its operations to the Ashanti Regional capital, Kumasi. This formed part of Uber’s continued strategic efforts to further expand its network within sub-Saharan Africa, after successful operations in Accra within a year.

    Country Manager for Uber Ghana, Kofi Agyare said the Kumasi service indicates Uber’s readiness to partner locals and policy makers as well as regulatory agencies to strengthen the business and economic opportunities in the region.

    “We have also ensured that the driver signup process is easy and seamless, with additional onsite support provided by our team of well-trained experts at the Greenlight Hub.”

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