SPEECH BY ER DR LEE BEE WAH, MP FOR NEE SOON GRC, AT THE SECOND READING OF INCOME TAX (AMENDMENT) BILL IN PARLIAMENT
Private-hire car (PHC) services which in the days of old used to be one of the modes of transport for those in the better-off segment of society, is today an affordable transport option for the masses. And, in spite of various issues enshrouding the PHC, the demand for their services has not abated. If at all, demand has in fact increased, and this is especially so for families with elderly and young children. And, also for those with less mobile family members as maneuvering around with buses and trains still has its challenges. The convenience of almost door-to-door service, and with a driver to assist those on wheel-chair, PHC is a good option.
So, PHC drivers provide a necessary transportation service for the public. They complement our taxi drivers. Hence, PHC drivers deserve to claim tax deductions and receive fair remuneration for their labour. However, as I have spoken up before in Parliament, I do think it is necessary to differentiate the tax regime between taxi drivers and PHC drivers. This is because taxi drivers use their vehicles solely for the transportation of passengers. On the other hand, PHC drivers may use the vehicles for personal purposes.
Private-hire platforms do not enforce a requirement on their drivers to clock minimum hours or trips on a daily basis, and these cars resemble regular cars, so the fact remains that there is potential for the tax claim regime to be abused, if the driver claims for mileage travelled for personal purposes. Moreover, some PHC drivers drive their own vehicles, so it is difficult to differentiate between personal use and work use. Maybe Minister can share with the House how will IRAS differentiate the two different categories of claims?
For fuel claims, I think that is quite straight forward as mileage clocked for ferrying passengers will be recorded by the PHC’s platform. But for parking and rental, it is next to impossible to identify how much of these expenses go into picking up passengers. And, once some PHC drivers are approved to provide courier services, there will be further blurring of lines between work and personal. Unlike ferrying a passenger, it is quite possible for a driver to detour during a non-urgent delivery, and attend to his own personal matters.
Undoubtedly, some PHC drivers are full-time drivers, and it would be somewhat unfair to deprive them from the same tax benefits as full-time taxi drivers. So, the way forward for a fairer tax regime, in my opinion, would be to introduce a minimum mileage clocking for PHC drivers who want to receive these benefits. Perhaps if Minister can clarify if this is being looked into already?
Sir, observing the current trend, the point-to-point service sector will only keep expanding. PHC platforms are enhancing their services to meet the needs for more courier services. In the meantime, we are seeing more ad-hoc couriers on our roads. These are people who drive their own vehicles from cars, vans to motorcycles. They pay for parking and in the case of motorcyclists they have to pay for high motorcycle COEs all of which come out of their own pockets. These are issues that I have already brought up in Parliament previously. I think it is important that the government recognise this trend and review the regulatory framework for this sector, including having an appropriate income tax regime for all these operators. If PHC drivers can claim income tax, will the Minister consider the inclusion of other self-employed delivery persons as well.
Sir, Chinese please. 让私召车司机扣税是个好主意，不过私召车和德士不同，没有每天最低里数的规定。如果司机大部分时间把车子当自己的车来使用，可能会滥用回扣并对全职的司机不公平。所以，建议要扣税的私召车，也要符合最低里数的规定。
Sir, I support the Bill. Thank you.