Taxation Law and Compliance in the Sharing Economy

Running head: Taxation Law
Taxation Law
Name of the Student
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Author Note

1
Taxation Law
Introduction
As per the law and other regulation the definition of shared economy is not given and
it is being used in various context in regards with the activity such as sharing economy and
gig economy. As per the black economy taskforce final report it is been emphasised upon the
harm which is been done to the community and the business. By imposing penalty on the
individual who pay tax honestly and it is a decline of the Australian Tax rules. It also affects
the small business enterprises which create uneven business grounds for those enterprise
(Zervas, Proserpio& Byers 2017). So it can be seen that the sharing economy is been growing
in recent years as it even helps in the growth in the job sector, innovation of the current
economy position and help the customers to have many choices of their preferences.
As per the research done by different entity it came out that due to increase in the
growth of shared economy there is a big risk related to the individual as the sharing economy
platform operators and seller will not able to give their accurate amount of tax which should
be paid by them (ABC News 2019). The basic of the tax elasticity is the economy advantages
in regards with the business and the consumer as it affects the one who are paying real
amount of the tax to the government. This implies that it only affect the one who are
following their duties properly and able to do the accurate things. So for this reason
Australian tax officers have made an agreement with some entity that will help them to gather
different kind of the information for the purpose of the shared economy (Allen 2015). The
entity allowed them for the data assembly under the ride of sourcing the section which allow
the ATO, so that it can able to take some actions that will help the Uber driver to recognize
about their obligations. This requires a huge process as an adoption of comprehensives tax
administrations that is broadly aimed at improving the compliance under this area.

2
Taxation Law
Compliance and Current Arrangement as per the Australian Income Tax Law:
As per the present scenario there is no proper information and clearness in regards with the
taxation related to the sharing economy in the country. So due to this reason the Australian
Taxation Officers are not able to understand the sellers as they are confusing whether the they
are showing their income undervalued due to non-available of the required amount of details
or they do so because they are willingly does not want to show high income to tax officers.
As per the research and the question are being done by the officers to the individual are all
are giving same reason as due to lack of knowledge about the shared economy there are not
able to identify the income so they are not able to know the correct amount of the income of
the individual (Australian Financial Review 2019).
As there is no proper amount of the details available about the shared economy so the lack
which is there by the seller is that the shared economy principle is not working as per the
traditional relationship of the between the employer and the employee so as the instead of the
independent contractor or the self-made principles which always out of the current regimes of
the reporting (Camilleri&Neuhofer2017). So this signify that the seller has not to record any
amount of the income which is been generated on the shared economy and it also may not
have the obligations in regards of the reporting about the details of the payments which are
made in related to that by the users to Australian Tax Officers. According to the “section 161
of the ITAA 1936”, every individual tax payer if asked by the commissioner should furnish
the necessary information regarding the income.
The sharing economy is an informal in nature so it makes very hard for the sellers to
understand its implications upon the activities that might be included upon the tax
calculation. It is the activities which the seller might think does not fall under the tax slab but