Private-hire drivers in Singapore can now claim Tax Deductions on vehicle-related expenses. Under the amendments to the Income Tax Act, vehicle-related expenses such as petrol and vehicle rental can be claimed as tax deductions.

Private-hire drivers can claim 60% of their income as expenses

Alex, a private-hire driver earns $35,000 in fares a year and receive $5,000 of incentives from Grab/Ryde. In total, he would have earned $40,000. He can classify 60% as expenses, which is $24,000.

He would only be taxed on the remaining amount ($40,000 – $24,000) which is $16,000.He is also eligible to claim personal income tax relief.

Personal Income Tax Table

Source: IRAS

Thus, his gross tax payable is $0.

This new amendment to the Income Tax Act is positive to the ride-hailing industry. Channelnewsasia also reported that MP Lee Bee Wah asked in Parliament if the government will consider extending this to the self-employed drivers such as couriers. We sincerely thank her for raising this issue in Parliament.

Latest development in the private-hire industry

In addition, LTA is also in discussion with operations to allow drivers to perform delivery services on a limited trial period.Operators can approach LTA to discuss on the adoption of such trials.

What are your views about the future development in the private-hire industry? Share your views at our forum.

Author: Lionel

Contact: [email protected]

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