Forum: Road tax framework balances multiple considerations
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We refer to Gurcharan Singh’s letter suggesting a review of the electric vehicle (EV) and plug-in hybrid electric vehicle road tax framework (Review framework to avoid penalising larger family cars, June 9).
Our road tax for cars is structured to be progressive, with a vehicle’s engine capacity or power rating (PR) serving as a proxy for luxury. The more powerful the car, the higher the road tax. For hybrid vehicles, the road tax is based on the higher of its internal combustion engine (ICE) capacity or its electric PR. This is so that the road tax incurred by such vehicles is comparable to similar ICE or electric cars. ICE vehicles pay fuel excise duties (FED), which is a usage charge. As EV owners do not pay FED, the additional flat component was introduced as an interim measure to partially replace FED while we explore alternative usage charges.
We will continue to monitor developments in vehicle technology and review the overall vehicle tax framework for the various propellant types.
Priscilla Chan
Group Director Policy & Planning
Land Transport Authority
