Written Reply by Minister for Transport Khaw Boon Wan to Parliamentary Question on Differentiation between Taxi Drivers and Part-Time Hire Drivers

Er Dr Lee Bee Wah asked the Minister for Transport

a.     whether he can update the House on the Ministry's review on the regulations of private-hire car services with a view to differentiate the tax regime between taxi drivers and part-time hire drivers; 

b.     whether the minimum mileage clocking is one of the areas under review to differentiate the two categories of drivers; and

c.     when is the review expected to be completed.

Reply by Minister for Transport Khaw Boon Wan:

1.     The Ministry of Finance (MOF) has reviewed the tax treatment for taxi and private hire car (PHC) drivers and held a public consultation on the draft Income Tax Amendment Bill 2018. The draft Bill proposes allowing PHC drivers, regardless of whether they drive part-time or full-time, to claim tax deductions on carrelated expenses against their driving income, under the revised tax treatment. This is because like taxi drivers, PHC drivers also provide similar point-to-point transport services. With this proposed change, all PHC drivers can enjoy the same tax treatment as taxi drivers. The proposed change will take effect from Year of Assessment 2019, that is, on income earned in 2018.

2.     To improve taxi availability, LTA had previously required taxi companies to maintain a certain percentage of their taxi fleets with minimum daily mileage of 250 kilometres. This was removed in 2017 as the introduction of private hire car services had boosted the availability and range of point-to-point options for commuters. 

3.     MOT is currently undertaking a review of the regulatory framework for the point-to-point service sector. More details will be released when ready.