Private hire drivers can claim tax deductions for car-related expenses: MOF

Following public feedback, the Ministry of Finance (MOF) said that private-hire car drivers will soon be able to claim tax deductions for car-related expenses.

If proposed amendments to the Income Tax Act are passed, drivers will also not need to file tax claims for service fees paid to platform providers separately – as they are currently doing now.

The draft text of the Income Tax (Amendment) Bill, which will be introduced in Parliament on Monday, Sep 10, said a report by Channel NewsAsia.

MOF said 100 suggestions were received from the public for the bill, and one common piece was for private-hire car drivers to be allowed tax deductions on car-related expenses. Some had also asked for the prescribed "deemed expense ratio" to be simplified and increased from 40 per cent to 60 per cent.

Photo courtesy: Grab
Photo courtesy: Grab

“For greater ease of compliance and simplicity, service fees will be included in the prescribed deemed expense ratio. Taxpayers can use the prescribed ratio to proxy all their deductible expenses, without having to claim tax deduction for service fees paid to platform providers separately.

“We have worked with the National Taxi Association and the National Private Hire Vehicle Association to study the common expenses incurred by private-hire car and taxi drivers. We will increase the prescribed deemed expense ratio (including service fees) to 60 per cent,” said MOF.

In addition, the Inland Revenue Authority of Singapore (IRAS) will be granted greater powers to investigate tax crimes under the draft bill. However, such powers will be limited to prevent potential abuse.

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CtoI News Desk
CtoI News Desk – CtoI

Singapore-headquartered online media company targeting Indian Diaspora across Singapore, US, UK and Dubai. Connected to India covers developments around Indians abroad, informing, engaging and entertaining its audiences.

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