GST on Rental of Taxis

Date: 16 September 2013

Parliamentary Question by Mr Ang Hin Kee:

To ask the Minister for Finance whether the Ministry will consider a review or removal of the Goods and Services Tax (GST) that is levied on the daily rental of taxis which taxi drivers have to bear.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

Mr Ang has asked whether the GST chargeable on the rental of taxis can be reviewed or waived. Taxi rental is part and parcel of the costs incurred in a taxi trade which attracts GST. We had designed our GST system to be broad-based, with few exemptions, to keep our GST rate low.

Traders generally meet their GST costs from their earnings.  Alternatively, they could register for GST, which would allow them to charge customers for GST and claim GST costs.

It is understandable that taxi drivers may not find it worthwhile to be GST-registered, especially as fares are set by the taxi operators. The Government is prepared to work with the National Taxi Association and taxi operators to explore if there are other options which could improve the taxi drivers' recovery of their GST costs.