Tax Treatment for Private-Hire Car Drivers

Parliamentary Question by Mr Louis Ng Kok Kwang:

To ask the Minister for Finance (a) what is the rationale behind allowing taxi drivers but not private-hire vehicle drivers to deduct expenses such as vehicle rental fees, fuel and ERP from their assessable income tax; and (b) whether the Ministry will consider allowing tax deductibility of these expenses for private-hire vehicle drivers based on the mileage clocked on private-hire driving.

Parliamentary Reply by 2nd Minister for Finance, Mr Lawrence Wong: 

1. Tax deduction of expenses incurred for a private car is not allowed. This is applied consistently to both corporate and individual taxpayers. This is in support of our long-standing policies on car ownership. Hence, currently, private-hire car drivers are not allowed to claim tax deduction on any car-related expenses. Private-hire car drivers can, however, claim tax deduction on non-car-related expenses such as commission paid to third-party operators.

2. The current tax treatment was introduced before the advent of companies like Grab and Uber. With the introduction of private-hire car services offered by Grab and Uber, the private-hire car drivers are essentially operating in the same space as taxis. We have noted the feedback from MPs^[1] and National Private Hire Vehicles Association. We are carefully reviewing this matter, to see how we can refine the tax policy, while supporting our car ownership policies.

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^[1] Louis Ng, Sun Xueling, Sitoh Yih Pin, Muhamad Faisal Abdul Manap, Ang Hin Kee (Executive Advisor to the National Private Hire Vehicles Association)