Uberisation of economies pinching state tax revenues

AFP, PARIS: With “sharing economy” services like Uber, Blablacar and Airbnb spreading among consumers, state tax collectors risk experiencing a revenue pinch as these new collaborative players capture market share from traditional businesses. The so-called “Uberisation” of commerce is both rising in volume and spreading across an ever-larger number of sectors—ranging from apartment, car and power tool sharing to money lending and food services. Increasingly popular trade directly between individuals is challenging the paradigm of traditional service businesses, and forcing national tax authorities to scramble for a way to get their piece of the action. “People speak of a digital revolution, but you also have to talk about a fiscal revolution,” said Bernard Lalande, a Socialist senator in France. He is among those who fear that many individuals generating income through Internet-based sharing services will not declare them for taxation as required.
“It’s very easy with these sites to generate extra income that escapes taxation... and since development of the sharing economy is being encouraged, losses by the state will increase automatically,” said Vincent Drezet, who heads the main labour union at France’s finance ministry. Michel Taly, a tax lawyer and former director of fiscal legislation at the ministry, agreed, saying “the Internet allows the return of the barter economy on a large scale”.
“If that leads to entire sectors exiting the traditional economy, we can really start worrying,” Taly said.
Beyond spreading “Uberisation” of sharing services, tax authorities are even more concerned about the wider booming digital economy, and challenges it presents to ensure all web merchants contribute their fair share to the public pot.

Uberisation of economies pinching state tax revenues

AFP, PARIS: With sharing economy services like Uber, Blablacar and Airbnb spreading among consumers, state tax collectors risk experiencing a revenue pinch as these new collaborative players capture market share from traditional businesses. The so-called Uberisation of commerce is both rising in volume and spreading across an ever-larger number of sectorsranging from apartment, car and power tool sharing to money lending and food services. Increasingly popular trade directly between individuals is challenging the paradigm of traditional service businesses, and forcing national tax authorities to scramble for a way to get their piece of the action. People speak of a digital revolution, but you also have to talk about a fiscal revolution, said Bernard Lalande, a Socialist senator in France. He is among those who fear that many individuals generating income through Internet-based sharing services will not declare them for taxation as required. Its very easy with these sites to generate extra income that escapes taxation... and since development of the sharing economy is being encouraged, losses by the state will increase automatically, said Vincent Drezet, who heads the main labour union at Frances finance ministry. Michel Taly, a tax lawyer and former director of fiscal legislation at the ministry, agreed, saying the Internet allows the return of the barter economy on a large scale. If that leads to entire sectors exiting the traditional economy, we can really start worrying, Taly said. Beyond spreading Uberisation of sharing services, tax authorities are even more concerned about the wider booming digital economy, and challenges it presents to ensure all web merchants contribute their fair share to the public pot.