[News] Emissions-based car taxes in the works
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The Government will soon announce a new emissions-based vehicle tax system.
It is expected to replace the decade-old green vehicle rebate scheme, which expires at the end of the year.
But more than just handing out tax rebates to buyers of environmentally friendlier cars, the new scheme will take a carrot-and-stick approach.
Buyers of fuel-efficient new cars stand to enjoy rebates of up to $15,000, which they can use to offset their vehicles’ Additional Registration Fee (ARF), the main car tax here. Those who go for more pollutive models may have to pay up to $15,000 in extra taxes.
The scheme follows closely the practice in the European Union, where cars are categorised by the amount of carbon dioxide (CO2) they produce, and taxed accordingly.
According to sources, a new car that produces less than 150g of CO2 per km will be eligible for a tax break of up to $15,000, while a model that produces more than 200g will be penalised by up to the same amount.
The majority of cars sold here today fall within the so-called neutral range of 150g-200g/km, which attracts neither incentive nor penalty.
Big luxury cars or sports cars – such as the BMW 760Li, Mercedes-Benz S600L, Porsche 911, Ferrari 458 and Lamborghini Gallardo – are expected to attract higher penalties under the new scheme.
And cars such as the Toyota Prius (a petrol-electric hatchback) and the Volkswagen Polo BlueMotion 1.2 (a turbodiesel hatchback) are likely to get the biggest incentives.
Buyers of other diesel models which produce less than 150g/km could also enjoy the tax break, as long as their cars meet the stringent Euro V emissions standard.
This is to ensure that these cars produce relatively low levels of nitrous oxides and hydrocarbons – two pollutants which are hazardous to health, and which diesel cars tend to emit more than petrol cars.
Diesel cars which enjoy the rebate will still be liable for the annual special diesel tax, which is $1.25 per cubic cm of engine displacement for cars that meet Euro IV standards or higher.
While the Land Transport Authority (LTA) – which will launch and enforce the new taxation scheme – is still in consultation with various stakeholders such as motor traders regarding finer details, The Straits Times understands that the general form of the proposed system has already been decided.
An announcement is expected within the next few weeks, and the scheme could kick in as soon as the green vehicle rebate runs out in December.
The green vehicle rebate was first introduced in 2001 to encourage the use of greener vehicles. But it has been criticised for its technology-dependent criteria. For instance, as long as a new car is electric, a petrol-electric hybrid or runs on compressed natural gas, it qualifies for a rebate equivalent to 40 per cent off its ARF. It does not matter how much C02 it releases from its tailpipe.
And because the rebate is a percentage of a car’s ARF, buyers of costlier models such as the Porsche Panamera Hybrid and Lexus LS600h – both limousines – save the most in absolute terms.
The emissions-based format is seen to be a more equitable solution, and has been lobbied for by various quarters.
In 2010, German car manufacturers, through the German Chamber of Industry and Commerce, submitted a ‘green paper’ to the Singapore Government proposing a carbon-based tax system.
A possible switch to an emissions-based system was first reported by The Straits Times in December.
Motor industry players said the new regime will make consumers more aware of the fuel efficiency of cars – and consequently the CO2 they emit – but is unlikely to fuel a big change in buying habits.
‘The neutral range is too wide,’ said one motor trader. ‘So, buyers of most cars today are not affected.’
Nor would the scheme make diesel cars significantly more attractive than now, as the punitive special annual tax is unlikely to be fully offset by the one-off rebate at the point of purchase.
Mr Raymond Tang, secretary of the Singapore Vehicle Traders Association, said: ‘A road tax reduction on top of an upfront rebate will be more meaningful, as the one-time rebate benefits only the first owner.’
Mr Tang said the association may also propose other practices in place in several European cities, such as restricting or banning the use of more pollutive vehicles in the city centre at certain times of the day.
The LTA would only say that a review of measures to encourage green vehicle usage has been in the works since last year. ‘Details will be released in due course,’ a spokesman said.
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The Land Transport Authority (LTA) will take over the fuel efficiency labelling of cars from the National Environment Agency (NEA) next year – a move that industry players say could pave the way for an emission-based vehicle tax system in the longer term.
Such a taxation system uses the amount of tailpipe emissions to determine how much a motorist pays in road tax or even excise duty, and has been adopted by several countries in recent years.
Asked if this was the eventual plan, an LTA spokesman would say only: ‘As announced by the Minister for Finance at Budget 2011, the Government is undertaking a comprehensive review on measures to promote the adoption of green vehicles, as part of our efforts to promote sustainable development.’
The fuel economy labelling scheme was launched two years ago by the NEA to raise awareness among consumers, who hopefully will opt for cars which are more efficient.
Such cars will use up relatively less fuel, and consequently produce less emissions than others which are less efficient.
The NEA made it mandatory for all new cars in showrooms to display this label – which declares the amount of fuel the vehicle uses for every 100km – but sources said some parallel importers still flout the rule.
The LTA said taking over the fuel economy labelling of cars will streamline the vehicle type approval process for motor traders.
‘Type approval’ refers to a process where the LTA inspects a new model before deciding whether to allow it to go on sale here.
‘LTA will become a one-stop centre for all vehicle type approval-related processes,’ the spokesman said.
Several quarters in the motor industry have lobbied for a shift from the current system that determines road tax and certificate of entitlement (COE) category by engine size, and the granting of the Green Vehicle Rebate (GVR) based on engine technology.
Last year, German car manufacturers, through the German Chamber of Industry and Commerce, submitted a ‘green paper’ to the Singapore Government proposing a carbon-based tax system.
Two months ago, Associate Professor Lee Der Horng of the National University of Singapore followed suit.
In a paper commissioned by the Motor Traders Association, Prof Lee proposed a separate COE category for green vehicles.
He also said that the current ‘special tax’ slapped on diesel cars should be replaced with a carbon-based tax that is consistent ‘across vehicles of different fuel types’.
Mr Wolfgang Huppenbauer, president and chief executive of Daimler South East Asia, told The Straits Times yesterday that the Government has had several consultative meetings with the German companies since the ‘green paper’, and that he was hopeful that some recommendations would be taken into consideration at the next Budget.
‘All the talks have triggered a thinking process,’ he said. ‘I’m confident that something positive will happen, but I don’t know exactly what at this stage.’
This year, Britain adopted an emission-based vehicle tax regime that has been in place in most of Europe for several years now.
Last year, South Africa introduced a vehicle emissions tax in its aim to slash greenhouse gases by 42 per cent by 2025.
Singapore has in its own way tried to incentivise green technologies. Its GVR, for instance, grants tax cuts to electric, petrol-electric hybrid and compressed natural gas cars.
Critics, however, say this scheme is technology-biased. For instance, it gives petrol-electric cars a 40 per cent cut in the Additional Registration Fee, which is the main tax levied on a car when it is registered, but none for diesel-electric hybrids.
Mr Gilbert von der Aue, who heads engineering firm C. Melchers’ oil and gas department, said the bulk of tax breaks from the GVR is now garnered by luxury models such as the Lexus and Porsche hybrids.
He said the criterion for granting the green rebate should be the amount of tailpipe gases a car emits, not the technology it uses.
‘A large hybrid vehicle may have more CO2 emission than a 2-litre compressed natural gas vehicle or even a compact petrol car,’ he said. ‘There should be a level playing field for all.’
Observers said the move for LTA to take on the new role could lead to tighter enforcement of fuel economy labelling, as well as economy figures declared by manufacturers being audited by independent parties.
These audited labels may then form the basis for determining car taxes or even tax rebates, they said.
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Do not know if such rulings affected taxis ?
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or i mean benefit taxis ?
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"And cars such as the Toyota Prius (a petrol-electric hatchback) and the Volkswagen Polo BlueMotion 1.2 (a turbodiesel hatchback) are likely to get the biggest incentives."
Meaning Prius is cheaper in rental in future ?
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Maybe this year's Budget maybe will say something by Tharman .
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if affect then all old crown and nissan and euro 1 and 2 spec taxi has to go, because they will be tax more. and CNG and prius taxi will get tax rebates? And also new taxi also get tax rebates and taxi companies should channel the rebate to reduce the rents and maybe increase of incentive??
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so fit rental got change?
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Looks like this paves the way for the camry hybrids to make their appearance :D
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Originally posted by ALN:
so fit rental got change?
GM asking for discount some more.... how can ?
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Thread very long leh....
I thought Poolman wants Short & Sharp posts.....
See so long.... I skipped...
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Another complicated ways of calculating the value, taxes etc of cars.. end of the day still pay and pay.
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Originally posted by f1taxidriver:
GM asking for discount some more.... how can ?
f1, how you know Aln is GM har? ya, Aln is GM of my office toilets... all cleaners report to me big shot wor... -
Benefits, the Taxi company will eat first, TD wait first ya..
Cost, Taxi company will immediately pass down to share the burden.
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Most taxi are either diesel or cng. That means whatever proposal, Taxis will benefit.
Implementation very soon, let's see what changes in the cost of running our business.
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Originally posted by Just_do_it_lah:
Thread very long leh....
I thought Poolman wants Short & Sharp posts.....
See so long.... I skipped...
yah lor so long.....zzzzz........
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Originally posted by Just_do_it_lah:
Thread very long leh....
I thought Poolman wants Short & Sharp posts.....
See so long.... I skipped...
your memory very good leh
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Originally posted by Just_do_it_lah:
Thread very long leh....
I thought Poolman wants Short & Sharp posts.....
See so long.... I skipped...
same... never read the first two post... -
i glance..... but eye pain, head pain and hair also pain when see so looong post.
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members , it's a cut n paste news report from CNA . my ang mor not so good , also dun have so much time to write so long winded essay .
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but news report worth it to read . . . if not everyday learnt what ? i everyday learning new things , if nothing to learn , i will think of how to learn from anything i saw that day .
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Originally posted by Poolman:
but news report worth it to read . . .
if not everyday learnt what ?
i everyday learning new things , if nothing to learn , i will think of how to learn from anything i saw that day .
of all. you learn from CNA
Read our post here and learn is far better
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Originally posted by Bo Call Liao:
Looks like this paves the way for the camry hybrids to make their appearance :D
camry hybrids run diseal?
if petrol, cdg wan invest in selling petrol liao?
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Originally posted by OptimalTrans:
of all. you learn from CNA
Read our post here and learn is far better
Are you serious ? I never changed my winning formula in reading CNA and Straits Times . -
Originally posted by ALN:
f1, how you know Aln is GM har? ya, Aln is GM of my office toilets... all cleaners report to me big shot wor...GM = good man. ALN is a good man
Like that can or not ?
Are you a good man, Sir ?
