Industry says Bill seeking to introduce sharing economy reporting regime is too broad

The Australian government is currently considering a Bill that seeks to amend tax laws to require electronic platform operators to provide information on transactions made through their platforms to the Australian Taxation Office (ATO).

The legislation was drafted following a recommendation made by Treasury’s Black Economy Taskforce for a sharing economy reporting regime to be introduced. The taskforce back in 2017 had found that, without a reporting regime in place, it would be difficult for the ATO to gain information on compliance of sharing economy participants unless targeted audits were used.

The Bill, introduced into Parliament at the end of last month, is currently being reviewed by the Economics Legislation Committee.

Appearing before that committee on Wednesday afternoon, the Tech Council of Australia (TCA) — which represents tech giants such as Atlassian, Canva, Google, and Microsoft — said the Bill currently has too much reach despite acknowledging it supported the need for such a reporting regime.

The Bill, as currently drafted, would apply to “electronic platforms” where services are offered and a buyer accepts and makes a payment for that service.

According to TCA CEO and founder Ashley Moreland, this application of the Bill’s reporting requirements is too broad and needs further clarification.

“To illustrate the breadth of this definition, it includes appointment booking engines for medical practices — so I have a member health engine, which is a service that allows a patient to find a suitable medical practitioner in the area and book and prepay for that appointment, it was a key tool used by the central government during the pandemic to make sure that patients could find telehealth services in their local area,” Moreland said.

“Now under the proposed legislation, this platform would be caught and that means any GPS or medical service providers offering services via this platform would then become liable by the platform operator to report very detailed and sensitive information, [a patient’s] full name, their birthday, their bank account details, their email address, net and gross income.”

Moreland added the reporting regime needed to be better targeted to avoid collecting data on users that “present no or little risk”, saying that almost every person that earns money on Airtasker — one of its members — did not earn enough to reach the GST registration threshold.

She warned these additional reporting requirements for certain categories of electronics platforms could be too onerous and potentially create a scenario similar to the robodebt scandal.

“As we saw with the collection of data around the JobKeeper application forms, which resulted in a multi-billion dollar overestimation customer scheme, user error when entering data into these forms is not uncommon and it can really affect the quality of the data and the risk of errors and analysis,” she said.

“Because as robodebt demonstrated, when you don’t get that data entry right, data matching right, and analysis right, you can produce results that miscalculate a person’s income and therefore their liabilities.”

To address these concerns, the TCA recommended in its submission for government to meet with industry to discuss the design elements and implementation of the reporting regime, including whether certain categories of electronic platforms should be exempt from the reporting regime.

Deliveroo head of corporate affairs Libby Hay shared a similar sentiment, telling the committee that the scope of the Bill’s reporting regime was too wide, and would result in Deliveroo copping onerous costs due to the additional administrative requirements that would arise.

Hay said the reporting regime should only apply to companies operating under a sharing economy model, claiming that Deliveroo worked under a different model.

She claimed Deliveroo operates under a gig economy model, which involves freelancers and independent contractors, whereas a sharing economy “refers to an economy based on the sharing, acquiring, and providing services through the facilitation of an online platform”. Due to this, Hay said the ATO would already have the taxation information of its food delivery riders as they are registered for GST reporting.

“So [the Bill] coming to us would be almost doubling up that information request because that information is already out there,” another Deliveroo representative told the committee.

In its submission to the committee, Deliveroo added it currently does not have insight into the GST treatment of its partners’ products.

“The GST treatment of their products is complex given the GST rate rules on food and beverages,” Deliveroo wrote.

“If we were to collect this data it would place us at the mercy of the restaurants to complete this information fully and accurately and would place a great strain on our business relationships trying to enforce this.”

When asked whether Deliveroo provides any tax assistance to its riders and restaurant partners, Hay told the committee it does not due to them being independent contractors or separate businesses.

In June, the ATO said it has raised AU$6.3 billion in liabilities, AU$3.5 billion of cash collections, and around AU$1.1 billion of what he referred to as “wider revenue effects” in those considered “public groups” since its Tax Avoidance Taskforce was created in 2016.

But following these efforts to thwart tax avoidance from multinational organisations, the ATO said it was now running out of big cases.

“Australia is a relatively small place, there are relatively few companies — because our strategy has been not just to collect tax, but to change future behaviour and lock in future compliance, we’ve sort of run out of big cases,” ATO client engagement group second commissioner Jeremy Hirschhorn said at the time.

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