Taxi operators to get at least $13m in tax reliefs

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TAXI operators will get at least $13 million in tax reliefs to help tide them over the slowdown, which has seen passenger numbers plummet.

Each cab will be entitled to a 30 per cent rebate on road tax for one year.

With the rebate, taxi companies will pay a road tax of $357 per cab per half-year, down from the current $510.

This is expected to cost the Government about $7 million. Operators are expected to pass the savings on to drivers.

Next, taxi companies will be given a waiver on the diesel tax for unhired cabs.

Such cabs are each levied an annual tax of $5,100, which is on top of the road tax.

Last November, the industry with its operator associations approached the Land Transport Authority (LTA) to ask for a suspension of taxes on unused cabs.

The LTA said: ‘Taxi ridership has been steadily declining since August 2008. The incomes of taxi drivers have also declined in tandem and are expected to worsen going forward. With the decline in demand for taxi services, the number of unhired taxis is on the increase.’

Under the waiver scheme, operators will have to park unhired cabs in secured yards, which will be subject to random audits. A cab will have to be unhired for at least two months to be eligible. If the unhired period is less than a year, the waiver will be pro-rated.

The LTA estimates that the waiver will cost the Government $6million, ‘based on the current number of unhired taxis’.

Commenting on the aid, head of the Government Parliamentary Committee for Transport, Mr Cedric Foo, said: ‘The road tax savings are not very significant for cabbies, but every little bit helps.’

As for the tax waiver for unhired taxis, he said ‘the objective is to reduce laid-up costs for operators…so as to avoid too large a fleet on the streets, which is not a good thing in a low-demand situation’.

Nomura Singapore head of research Lim Jit Soon said the diesel tax waiver for unhired cabs was significant as it was the first time such a measure has been granted. As for savings from the road tax rebate, he said: ‘It is better to give drivers direct rebates, rather than something indirect, like topping up their Medisave.’

Mr Teo Kiang Ang, managing director of Trans-Cab, said the road tax rebate was ‘very good’. ‘We will pass it on fully to our drivers.’

ComfortDelGro spokesman Tammy Tan said her company – the biggest taxi firm here – will save about $4.6 million on the road tax measure. ‘That works out to $306 per cab per year,’ she said. ‘We will pass all savings to drivers.’

Smart Taxis and Premier Taxis said they would do likewise.

Cabby Tony Pang, 59, welcomed the road tax move, but said the unhired cabs tax waiver ‘will benefit only operators’.