Tax drivers of private cars for hire 'fairly'

Association representing them says their running expenses not tax-deductible, unlike cabbies'

 A passenger boarding a Uber car at Bishan Junction 8.
A passenger boarding a Uber car at Bishan Junction 8. ST PHOTO: DANIEL YEO

Private-hire vehicle drivers should be taxed "in a fair manner, like other businesses of a similar nature", said the National Private Hire Vehicles Association (NPHVA) yesterday.

In a statement, it called on the Inland Revenue Authority of Singapore (Iras) to review the allowable business expenses for such drivers.

NPHVA's executive secretary, Mr Mohd Randy, said: "Unlike taxis, private-hire vehicle expenses such as fuel, vehicle rental fee, Electronic Road Pricing (ERP) expenses and other running expenses are, at present, not tax-deductible."

On Sunday, The Sunday Times reported that Iras had approached two ride-hailing firms, Uber and Grab, to work out an arrangement for their drivers to file tax returns automatically. As earnings are captured by their respective phone apps, an automatic system would ensure they are not under-declared.

Both firms have together amassed over 40,000 drivers since 2013.

While NPHVA said Iras' efforts to allow e-filing of tax returns would be convenient for drivers, it said other regulations should continue to be reviewed as well.

"Where a private-hire vehicle is owned by a driver, there are also overheads such as repair, maintenance and vehicle insurance to consider," Mr Randy said.

He conceded that it could be difficult to calculate what is tax-deductible if a vehicle is not used primarily for business.

"One possibility is to explore tax deductibility based on the mileage clocked on private-hire driving as practised overseas," he suggested.

He said that NPHVA looks forward to "a fairer approach in the treatment of income from private-hire vehicle driving, and stands ready to discuss this further with Iras".

Private-hire drivers told The Straits Times that they support this call.

"It should be a given that such expenses are tax-deductible," said a 50-year-old private-hire driver who wanted to be known only as Albert. "If they need us to provide proof of the expenses, it can be done."

Mr Alfred Ng, 63, who drives for both Uber and Grab, said he spends over $3,000 per month on costs, including vehicle rental, petrol and ERP fees.

The private-hire driver of one year plies the road for six hours on average each day.

"They should be clear about what tax-deductible expenses are for private-hire drivers," said Mr Ng. "If they have a different set of rules for us, drivers are not going to be too happy."

Mr Zainal Sapari, deputy chairman of the Government Parliamentary Committee for manpower, agreed that tax-deductible expenses for private-hire vehicles should be similar to those of taxis. He said: "I don't think Iras will be setting any precedent because it is the same treatment that is given to people who operate commercial vehicles - meaning they require a vehicle as part of their business - where they are allowed to deduct the costs of operating them."

But he added that there should also be safeguards against people who may inflate their deductible claims. "We don't want people to exploit any loopholes."

A version of this article appeared in the print edition of The Straits Times on September 20, 2017, with the headline 'Tax drivers of private cars for hire 'fairly''. Subscribe