Increasing 60% Deemed Expense Ratio for Private Hire Car and Taxi Drivers Given Higher Operating Costs

Ms Mariam Jaafar asked the Deputy Prime Minister and Minister for Finance whether IRAS will consider increasing the 60% deemed expense ratio for private hire car and taxi drivers in light of higher operating costs, such as increased car rental and petrol prices.

Since Year of Assessment 2019, private hire car and taxi drivers have the option to claim income tax deduction based on a Fixed Expense Deduction Ratio (FEDR), set at 60% of their gross driving income, in lieu of claiming the actual amount of expenses incurred. The intent of the FEDR is to ease the tax filing compliance for private hire car and taxi drivers. The Inland Revenue Authority of Singapore (IRAS) regularly reviews the FEDR to ensure it remains relevant and reflective of actual expenses of the drivers.

IRAS recently completed a review in 2023 and concluded that the current 60% FEDR remains sufficient for the vast majority of the drivers. While operating expenses for the drivers have increased, revenue, too, has grown due to increases in meter and mileage rates. For those whose actual deductible expenses exceed the 60% ratio, the option remains for them to claim deductions based on the actual expenses they incurred.

We will continue to monitor if there is a need to adjust the FEDR.