Should Governments Engage Contractors If They Owe Taxes?

Government – Innovation Vs Regulation

As we reported in a recently shared article, governments are starting to embrace the gig economy and engage more contingent and project-based workers across a range of different departments for a number of varying tasks.

This is a trend that is well underway in the private sector, but now governments are also following suit.  One of the big challenges for governments however, is related to regulation and engaging contractors who owe taxes.

In a recent WSJ article, City Comptroller Scott Stringer said New York city made payments to 200 or more contractors last year for their services and that these contractors also were shown to have unpaid taxes and faulted the city for paying contractors who owed taxes.  Click here to see the full article.

“As written about many times and spoken about at conferences, governments are becoming increasingly aware that workers in their countries are performing gig jobs via the many social job platforms.  Governments have increased audits of payments into countries that don’t report or record taxes.”

John F. Smith, Managing Director
CXC Global Americas
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“It’s a double edged sword.  On one hand, governments need consultants to fill in gaps across several verticals of government works and do not want to deter the talent away from public service.  On the other hand, municipalities are under pressure to collect for all public services.  Perhaps reducing the Social Security burden for the self-employed to equal full-time workers share of the statutory costs can help even out the books on both ends.”

Lou Calamaras, CCWP, Director Client Solutions
CXC Global North America.
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This does raise some very pertinent questions about vendor payments and invoice collection for the non-permanent workforce.

With compliance being a key focus for CXC Global, we remain committed to advise and assist companies around the globe about compliantly engaging their contingent / non-employee workforce.

To learn more about our global workforce solutions, connect with Lou directly, or complete and submit the below form and one of our specialists will contact you.

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Written by Kathryn Hopkins