Uber to Withhold Mexico Driver Taxes in Landmark Deal
- Voluntary pilot tax plan to be launched as soon as next week
- Uber to collect from drivers as much as 9% in income tax
After months of setbacks, Mexico is now on the cusp of rolling out an automatic tax payment system that forms a key part of its effort to crack down on evasion. And the government scored a marquee name -- Uber Technologies Inc. -- to be its first participant, according to a person familiar with the negotiations.
For Mexico, it’s a big get. The country has been looking for ways to boost tax collection that’s the worst among members of the Organisation for Economic Cooperation and Development, a result of an economy that remains largely informal. Uber is a key ally -- it dominates more than 80 percent of the market in Mexico, according to Dalia Research, and it also likely has many drivers and restaurants who don’t properly report or pay income tax. For Uber, the once-combative tech giant, it’s a test to a new strategy of offering more gestures of cooperation to governments.