Due to be launched next year, the system the first of its kind in the world will automatically include the amount earned by drivers in the tax return, although payers can make changes.
"We want to make our partner drivers' life easier and offer solutions to quickly and easily declare their income and pay taxes," said Uber Estonia chief executive Enn Metsar.
"Using Uber is easy and seamless, there is no reason why dealing with the government would need to be bureaucratic and cumbersome," he told AFP.
"We want to export the solution that we are developing in Estonia to the whole world," said Metsar.
The system, which will not apply to regular taxi drivers, has made some Uber drivers quit.
But on the whole, the company has seen the number of its drivers grow steadily since it launched activities in Estonia six months ago, to the dismay of regular taxi services.
Estonian President Toomas Hendrik Ilves said the EU and eurozone member was "looking for a solution instead of prohibiting a new form of business."
Uber has become one of the world's most valuable startups, worth an estimated $50 billion, as it has expanded to more than 50 countries.