Uber drivers and other "ride sourcing" cabbies will be forced to pay GST following a tax office ruling that the new driver services flooding capital cities would be treated as taxis.
The ruling, to be announced today, means that the cheaper rides booked through mobile phone apps are about to become more expensive.
But it will level the playing field for established taxi service providers who have complained their businesses were being eroded by ride sourcing services playing by different rules.
Australian Taxation Office deputy commissioner James O'Halloran said drivers would have until August 1 to register for GST and obtain an ABN. They could face fines for failing to register.
The ATO said all it was doing was creating a level playing field for taxi services
"Affected drivers must register for GST, charge GST on the full fare, lodge business activity statements and report the income in their tax returns," Mr O'Halloran said.
Uber, a US-based transport network funded by venture capitalists, is now said to be worth close to $10 billion and operates in more than 50 countries. The ATO said all it was doing was creating a level playing field for taxi services.
Uber's Australian general manager David Rohrsheim said the decision would add unnecessary red tape for thousands of ordinary Australians.
The typical uberX partner in Australia works for about 20 hours a week and takes home about $30,000 per annum
"These are 9000 individuals who will now be caught up in red tape before they even accept their first ride and will then be hit with a tax on their very first dollar earned, unlike truck drivers, painters, online sellers, gardeners, other sharing economy participants and every other small business who do not have to collect GST until their business reaches $75,000 per annum in turnover," he said.
"The typical uberX partner in Australia works for about 20 hours a week and takes home about $30,000 per annum - well under the government's threshold for GST."