Car ownership in Singapore is progressive through ARF: MOT
MOT director for private and shared mobility Elaine Koh said this in a letter on Tuesday (Aug 5) in response to a recent commentary by The Business Times property correspondent Leslie Yee.
Yee proposed the introduction of ABSD-like measures, such as levying a premium on those who buy more than one car, on permanent residents (PRs) and non-PR foreigners and companies buying cars, in a piece titled 'Should the COE (Certificate of Entitlement) system for cars borrow ideas from the ABSD regime for homes?'.
ABSD was introduced in 2011 to 'promote a sustainable residential property market where prices move in line with economic fundamentals', said the Urban Redevelopment Authority at the time.
Currently, it levies an additional 20 per cent on the purchase price or market value of the property on Singaporeans buying a second home, 5 per cent on a PR buying their first home, while a non-PR foreigner pays 60 per cent, and an entity or a trustee buying a home pays 65 per cent.
Yee also proposed that COE premiums be a percentage of a car's open market value (OMV), which is the price paid for the car when it lands in Singapore, including shipping and insurance, but before any local taxes.
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This would overcome the 'possibly regressive' elements of COEs now, since the premium for Category A, for mainstream cars, is a much higher percentage of the total car cost compared with that for Category B, the category for larger, luxurious cars.
But Koh pointed out that progressivity in the vehicular tax system is already achieved through ARF, which is a tiered tax that increases depending on vehicle cost, and that it has been increased twice in the past four years.
The tax rate for the first tier, up to S$20,000, is 100 per cent of the OMV, while that for the next tier – S$20,001 to S$40,000 – is 140 per cent, eventually rising to 320 per cent of the OMV for S$80,001 and above. The tiered ARF was introduced in 2013, and increased in 2022 and 2023 .
Koh said that levies on additional cars would not be effective as only 5 per cent of households here own more than one car, while foreigners account for less than 2 per cent of all successful COE bids.
An ABSD-style system would also be costly to administer and enforce, she noted, without elaborating.
She concluded by saying that the government cannot guarantee its one million resident households a car, but can guarantee every Singaporean affordable and high-quality transportation.
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20 hours ago
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COEs: Large car category reaches new 2025 high of S$124k as some dealers 'caught off guard'
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Business Times
a day ago
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COEs: Large car category reaches new 2025 high of S$124k as some dealers ‘caught off guard'
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CNA
a day ago
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