SINGAPORE: Private car drivers will soon be able to claim tax deductions for costs after the Ministry of Finance (MOF) has accepted public feedback on proposed changes to the Income Tax Act.
If the changes are accepted, both private renters and taxi drivers no longer have to file separate tax returns for service costs paid to platform providers such as Grab and Ryde.
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 private drivers had tax deductions for car expenses in relation to their driving income.
"For increased compliance and 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 to platform providers separately, "said he.
Some also asked for the prescribed "fictitious cost ratio" to be simplified and increased – from 40 percent to 60 percent.
The proposed changes will raise the cost ratio to 60 percent for both private landlords and taxi drivers.
The ministry said it consulted both the National Taxi Association and the National Private Hire Vehicle Association on the common costs incurred by drivers before they decided to adjust the cost ratio.
MORE POWERS FOR IRAS TO EXAMINE TAX CRIMES
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.