Executive manager of Finnish delivery service Wolt in Estonia Liis Ristal was very surprised to hear that Estonian competitor Bolt does not pay labor taxes on the income of its couriers," Eesti Päevaleht (EPL) reports. (Link in Estonian)

"The tax board has made an exception for ridesharing platforms by arbitrarily circumventing the law. Instructions on the agency's website read that private drivers who make a few isolated trips that cannot be seen as business activity must declare income in their tax returns and pay income tax," Reform Party MP, former head of the board Aivar Sõerd told the paper.

The board's previous head Marek Helm told EPL that when the ridesharing platform Uber first started in Estonia in 2015, it was agreed a simple way would be found for drivers to report their income to the board and pay income tax.

Helm said the because the first ride-hailing drivers did it on the side and tax revenue from traditional taxi drivers was modest, it was decided the state would have nothing to lose by supporting a new sharing economy company in that ridesharing drivers would not have to pay social tax.

These days, the MTA finds that because offering taxi services through IT platforms is business activity, the service provider must decide which form of enterprise they want to use and pay taxes accordingly.

"People who work through sharing economy do not have a choice of whether to pay or not – in most cases, it constitutes business activity. And an entrepreneur must pay their own taxes as they can also declare expenses. In other words, the company that makes payments to drivers cannot correctly calculate their tax burden," Evelyn Liivamägi from the board's taxes department said on the "Vikerhommik" radio program on Monday morning.

"Rather, we are moving toward everyone active in sharing economy choosing a correct form of taxation. With entrepreneurs acting like entrepreneurs instead of an individual who fails to declare income. When sharing economy first appeared – there were no enterprise accounts then – taxation was so unrealistic that no one would have complied, which is when we allowed these platforms to send in income tax return data. However, this data has dried up over the years, with people choosing the correct form of taxation, which in this case – the example of Bolt in this article – is business and calls for different kind of taxation," Liivamägi said.

EPL notes, however, that while an ordinary salaried worker has taxes deducted from pay before they receive it, things are different for ride-hailing drivers, and the state misses out on tax revenue provided they do not know how or choose not to declare income.

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