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Michal: Collaborative economy must be given an opportunity

The Minister of Economic Affairs and Infrastucture Kristen Michal
The Minister of Economic Affairs and Infrastucture Kristen Michal

From the 27th to 28th of January Ministers of the Competitiveness Council met each other informally in Amsterdam where the Minister of Economic Affairs and Infrastructure Kristen Michal encouraged co-ministers and entrepreneurs to take over new innovative business models and noted that Estonia promotes the greater use of the opportunities of collaborative economics.

In Estonia, one example of the collaborative economy is Uber, which offers a ride sharing service. Uber's general manager Enn Metsar also accompanied the minister at the meeting.

"When taking a broader look on the attitude towards collaborative economy across  Europe, Estonia gives a good example with its pragmatic and forward-looking standpoint. While the Old-Europe is often focused on problems, the Baltic countries are searching new solutions and opportunities. At the meeting of the Council we emphasized the common positions of Uber and Estonia. The digital single market has to function in all member states of the European Union, in order to be able to compete with the markets of the United States and Asia. We also need to learn from the innovative approach that the digital economy and the country are doing together. Our co-operation with Estonia is a very good example of creating solutions that work in the new economy," the general manager of Uber Estonia Enn Metsar said.

"If the new economical models are able to offer a more convenient service that people like to use, then the state should not prohibit it. On the contrary, we are trying to find a balance between the new and traditional services and ensure that users have the opportunity to choose and that people would be able to participate in business and entrepreneurship even alongside their main job. In ten years there will be a predicted 25-fold increase in volume of the five largest collaborative economy fields. In Europe, we must deal with the regulations favoring collaborative economy today, because people's preferences and behaviour change and therein lies a great economical potential," said Michal.

The Minister of Economic Affairs and Infrastructure Kristen Michal added that in many EU countries, one of the reasons for repelling attitude towards such services are challenges related to taxation.

"In the tax issues, Uber has had a tight cooperation with the Tax and Customs Board to develop a system for collecting taxes as comfortably and automatically as possible. This system will be used by all the participants in collaborative economy. When business-related reporting is as minimal, transparent and automatized as possible, then it will also help promote start-ups," the Minister noted.

The Tax Board is committed to ensure that natural persons' tax data would be prefilled for submitting the next personal income tax return. A similar system is also intended to be provided for a person liable to value added tax, to make the VAT accounting as automatized as possible. Using these solutions is optional, so they must provide a distinct added value to the traditional declaration of income.


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