Separate Tax Regimes: Taxis and Private-Hire Cars

On 6 November 2017, Minister for Finance, Mr Heng Swee Keat, responded to a Parliamentary question about the differences between the tax regimes governing drivers of taxis and private-hire cars in Singapore, and whether an assimilation of these regimes will occur in the future.

Tax Deduction for Expenses Incurred

The following expenses incurred by taxi drivers in the production of their income are eligible for tax deduction:

1. Vehicle Rental Fee
2. Diesel
3. Parking Charges

On the other hand, given that drivers of private-hire or ride hailing cars cannot be assumed to use their vehicles principally for business purposes, and as “many drive on a part-time or casual basis”, deduction for tax with regards to expenses incurred on their cars is not allowed.

Mr Heng elaborated that this tax treatment reinforces Singapore’s policy in managing its car population and is applied to both individual and corporate taxpayers.

However, private-hire ride-hailing car drivers can claim the following tax deductions for other non-car expenses:

1. Commission paid to third-party operators.
2. Administrative charges levied by third-party operators.
3. Proportion of expenses for mobile phones used during the course of providing their services.

Tax Regimes for Taxi and Ride Hailing Services to Remain Separate

Mr Heng said that there are currently no plans to assimilate both tax regimes, citing the prevailing differences in the regulatory regimes and business models for taxis and ride-hailing services.

Source: Ministry of Finance, Singapore