Private-Hire Drivers alert! The Sunday Times reported that Inland Revenue Authority of Singapore (IRAS) has approached the two ride-hailing firms.
It is to make the filing of taxes automatic for their strength of 40,000 drivers.
Under the proposed new arrangements, both Uber and Grab are required to submit the earning of every individual private-hire driver that has driven for them in the financial year to IRAS.
The driver will then log into his tax portal, make adjustments to his expenses before submitting his tax filings.
IRAS has previously done it for the real estate and insurance agencies where the agencies file the annual earning of their associates with IRAS instead of individual filing their own taxes.
IRAS says that they continually seek ways to explore initiatives with 3rd party and platforms to automate the transmission of income information directly into their tax system for ease for tax filing and compliance for taxpayers.
What it means for Private-Hire Drivers
Private-Hire Drivers will not be able to under declare or avoid paying taxes as Uber and Grab will submit your earnings on your behalf. Surprisingly, many private-hire drivers do not know that they are required to pay taxes or how to file taxes as a self-employed Uber/Grab driver. Expenses such as car rental, petrol and parking costs are not tax-deductible for private-hire cars.
Many Uber/Grab Drivers were ex taxi-drivers and assumed that they were subjected to the same tax treatment. Taxi Drivers were allowed to less off expenses such as vehicle rental fee, diesel expenses and even vehicle washing expenses.
Why are Taxi Drivers not part of the Auto-Filing scheme
Many of taxi-drivers jobs come from street-hail and it is not easily tracked for cash jobs compared to jobs that were assigned through the booking apps. As the shift towards an app-based booking and cashless society, it might just be a matter of time where taxi-drivers are also included in the auto-filing scheme.
Wait! There is more to pay than you know
All self-employed Private-Hire Drivers are also required to contribute to their Medisave account.
What if I don’t pay for my Medisave
In most cases, the CPF board will be flexible in repayment for those with genuine financial difficulties. However, the CPF board can take the self-employed defaulter to court as a final resort if the offender refused to pay without any genuine reason.
The CPF board can also block your renewing of your Private car Driver Vocational Licence (PDVL) or taxi vocational licence if there is no approved arrangement with the CPF board for the payment of outstanding Medisave contributions. Property and insurance agents are also subjected to the similar requirement before they can renew your licence annually.
Start setting aside some money for your annual income tax and Medisave for self-employed contributions. It is going to be a painful process to pay more every month but you do not have a choice. If you still want to drive to make money, be prepared to pay!
