Deducting Expenses from Assessable Income Tax for Taxi Drivers and Private Hire Car Drivers

Mr Speaker, Sir, tax deduction of expenses incurred for a private car is currently not allowed. This is applied consistently to both corporate and individual taxpayers. It is in support of our long-standing policies on car ownership. That is why private car drivers today 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 commissions paid to third-party operators.

The current tax treatment that we have was introduced before the advent of companies like Grab and Uber. With the introduction of private hire car services, the private hire car drivers are essentially operating in the same space as taxis. We have noted the feedback from Members of this House and the National Private Hire Vehicles Association. We are carefully reviewing this matter to see how we can refine the tax policy to ensure they remain relevant and effective.

I thank the Minister for the reply. I do agree that perhaps the tax regimes for taxi drivers and part-time private hire drivers should be different. But I think for full-time private hire drivers, it should be the same and I am just wondering whether the Minister would consider establishing, say, a minimum mileage clock, after which then the private hire driver is considered full-time and can then enjoy the same tax regime as a taxi driver.

Mr Speaker, Sir, we are reviewing this holistically and it has also to be done in conjunction with the Ministry of Transport's (MOT's) ongoing review of the regulations on such private hire car services. So, that is happening now. MOT and Land Transport Authority (LTA) are reviewing the regulations for this group of companies, how they should be regulated vis-a-vis taxi companies. When that is done and clearer, I think the tax treatment can also be adjusted accordingly.

Sir, I would like to ask the Minister how long will the Ministry take for the review, that is, what the timeline is, because this is quite a hot topic discussed on the ground.

Mr Speaker, Sir, I have to look to my colleagues from MOT. Because as I said earlier, the reviews are being done in parallel. I think the tax treatment must be consistent with also the regulatory treatment. I believe MOT and LTA have announced that they are doing this review on the regulations of private hire car services, and we at the Ministry of Finance (MOF) are also looking at the tax treatment. And both are moving in parallel. Once the reviews are completed, we will be able to announce on the MOT side, the regulations; and on the MOF side, the tax treatment.