SINGAPORE: Private-hire car drivers will soon be able to claim tax deductions for expenses, after the Ministry of Finance (MOF) accepted public feedback on proposed amendments to the Income Tax Act.
If the amendments are passed, both private-hire and taxi drivers will also no longer need to file tax claims separately for service fees paid to platform providers like Grab and Ryde.
MOF said it received 100 suggestions, of which 37 were accepted and revisions made accordingly to the draft text of the Income Tax (Amendment) Bill, which will be introduced in Parliament on Monday (Sep 10).
The ministry said one common piece of feedback it received was for private-hire drivers to be allowed tax deductions on car-related expenses against their driving income.
“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," it said.
Some also asked for the prescribed "deemed expense ratio" to be simplified and increased - from 40 per cent to 60 per cent.
Under the proposed amendments, the expense ratio will be increased to 60 per cent for both private-hire and taxi drivers.
The ministry said it consulted both the National Taxi Association and the National Private Hire Vehicle Association on the common expenses incurred by drivers before it decided to adjust the expense ratio.
GREATER POWERS FOR IRAS TO INVESTIGATE TAX CRIMES
Under the draft Bill, the Inland Revenue Authority of Singapore (IRAS) will be granted greater powers to investigate tax crimes, although such powers will be limited to prevent potential abuse.
Among the feedback MOF has rejected is one suggesting that a taxpayer be notified once IRAS has passed on his information to law enforcement agencies.
“The proposed amendment is intended to allow IRAS to share with law enforcement agencies information that IRAS assesses as necessary for investigation or prosecution of serious crimes only. Such serious crimes include drug dealing and corruption.
“Notifying the taxpayer of the information shared or how information may be shared will alert potential suspects on ongoing investigations into serious crimes, thereby prejudicing the investigations,” MOF said.