Private landlords can apply for tax deductions after public feedback: MOF

SINGAPORE: Private car drivers will soon be able to claim tax deductions for car expenses after the Ministry of Finance (MOF) has accepted public feedback on proposed changes to the income tax law.

These drivers also do not need to file tax claims for service costs that platform platforms have to pay separately, as taxi drivers currently need to do, if the changes are approved.

MOF said it had received 100 suggestions, 37 of which were accepted and revisions accordingly to the draft text of the Income Tax Law (amendment), which will be submitted to Parliament on Monday (10 September).

The ministry said that a common piece of feedback that it received was that car drivers could get tax deductions for car expenses from private cars.

Some also asked for the prescribed "fictitious cost ratio" to be simplified and increased – from 40 percent to 60 percent.

"For service and compliance simplicity, service costs will be included in the presumed cost ratio." Taxpayers can use the prescribed ratio to pay all their deductible costs without having to claim tax deductions for service costs paid separately to platform providers.

"We have worked with the National Taxi Association and the National Private Hire Vehicle Association to study the common costs of private rental cars and taxi drivers, and we will increase the presumed cost ratio (including service charges) to 60 percent," SLEEVE.

Under the draft legislative proposal, the Inland Revenue Authority of Singapore (IRAS) will be given more powers to investigate tax crimes, although such powers will be limited to prevent possible misuse.

One of the feedback rejected by MOF is a proposal that suggests that a taxpayer should be notified once IRAS has passed on information to law enforcement agencies.

"The proposed amendment is intended to enable IRAS to share information with law enforcement agencies that IRAS considers necessary to investigate or prosecute serious crimes." Such serious crimes are drug trafficking and corruption.

"By informing the taxpayer of the information that is shared or how information can be shared, potential suspects are alerted to ongoing investigations into serious crimes, thereby undermining the investigations," said MOF.

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