Singapore Rejects Property Tax Ideas for Car Ownership

Ministry of Transport: Additional Registration Fee Already Ensures Progressivity

Singapore’s Ministry of Transport (MOT) has stated that the existing Additional Registration Fee (ARF) system sufficiently ensures progressive car ownership, negating the need for measures similar to those applied to residential property under the Additional Buyer’s Stamp Duty (ABSD).

ARF Adequacy Questioned, Then Defended

The stance was articulated by MOT director for private and shared mobility, Elaine Koh, in a letter responding to a commentary. The commentary had suggested implementing ABSD-like levies on permanent residents, foreigners, and companies purchasing vehicles, and re-structuring Certificate of Entitlement (COE) premiums to be a percentage of a car’s open market value (OMV).

The proposed ABSD-style measures aimed to curb multiple car ownership and address perceived regressivity in the current COE system, where premiums for smaller cars (Category A) represent a larger portion of the total cost compared to luxury cars (Category B).

Ministry Cites ARF’s Tiered Structure

Koh countered that progressivity is already embedded within the vehicular tax framework through the ARF. This tax is tiered, with rates escalating based on a vehicle’s OMV. For instance, the ARF is 100% of OMV for the first S$20,000, rising to 140% for OMV between S$20,001 and S$40,000, and reaching 320% for OMVs exceeding S$80,001. The tiered ARF was introduced in 2013 and has seen increases in 2022 and 2023.

She highlighted that applying levies on additional cars would have limited impact, as only 5% of households own more than one vehicle, and foreigners constitute less than 2% of successful COE bids. Furthermore, an ABSD-like system for cars would incur significant administrative and enforcement costs.

Focus on Public Transport Accessibility

Koh concluded by emphasizing that while the government cannot guarantee every household ownership of a car, it is committed to ensuring all Singaporeans have access to affordable and high-quality public transportation. This aligns with Singapore’s broader strategy to promote sustainable mobility and manage vehicle population growth.

As of 2023, Singapore’s public transport system serves over 5 million commuters daily, demonstrating its critical role in the nation’s infrastructure. The country’s strategy aims to balance private vehicle ownership with efficient public transit options. (Land Transport Authority, 2024)