The taxman will have greater powers to investigate crimes after Parliament passed changes to the Income Tax Act yesterday.
One revision will allow Inland Revenue Authority of Singapore (Iras) officers to enter premises by force or arrest someone without a warrant if the situation meets certain conditions. These include a suspect trying to destroy evidence.
Second Minister for Finance Lawrence Wong told Parliament yesterday: "Tax offenders and criminal syndicates are becoming more obstructive and are employing more sophisticated schemes to defraud the authorities and to cover up their crimes.
"Enhanced investigative powers are required to more effectively deal with serious tax offenders, as well as acts of obstruction which may hamper Iras' investigations and prosecution."
Other changes include allowing private-hire drivers to claim tax deductions on car-related expenses. Previously, this was only applicable to taxi drivers. This means that 60 per cent of a private-hire driver's income can be considered expenses.
For example, a driver who earns $50,000 a year in fares as well as $15,000 in incentives from a platform provider like Grab could have $39,000 - or 60 per cent - of that income deemed as expenses. So he will be taxed on his net earnings of $26,000, before claims for personal income tax relief.
Enhanced investigative powers are required to more effectively deal with serious tax offenders, as well as acts of obstruction which may hamper Iras' investigations and prosecution.
SECOND MINISTER FOR FINANCE AND NATIONAL DEVELOPMENT MINISTER LAWRENCE WONG
Alternatively, he could claim tax deductions on his actual expenses but this would require him to keep meticulous records.
Five MPs spoke on the Bill. While they supported the changes, Mr Louis Ng (Nee Soon GRC) and Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) were concerned about possible abuses of power.
Mr Wong, who is also National Development Minister, said tax officers would undergo training programmes similar to those undertaken by the police.
MPs were pleased that the 37,000 private-hire drivers would have their tax burden substantially reduced with the changes.
But Nominated MP Walter Theseira, Mr Chen Show Mao (Aljunied GRC) and Mr Saktiandi raised the concern of more people joining the gig economy at the expense of squirrelling away funds for longer-term needs like their retirement or medical care.
Mr Wong said the Government is "very mindful of this issue". That is why it said earlier this year it is looking at how to roll out a "contribute-as-you-earn" model, he added.
Under this scheme, a service buyer hiring a freelancer has to make a contribution to the person's Medisave account, as and when the service fee is paid. Government procurement entities aim to start a pilot by 2020.