More expensive cars will have to pay higher Additional Registration Fees (ARF) with a new tiered tax rate being introduced.
Currently, the main vehicle tax or ARF is calculated as a flat rate of 100 per cent of a car's Open Market Value (OMV).
The new tiered structure means that a car with an OMV of $20,000 will incur the current tax rate of 100 per cent, but the next $30,000 of the car's OMV will be taxed at 140 per cent. The remaining OMV above $50,000 will be taxed at 180 per cent.
Tiered Additional Registration Fee (ARF) for passenger cars and taxis
Source: Ministry of Finance
Deputy Prime Minister Tharman Shanmugaratnam announced this during his Budget speech on Monday and said this will contribute in about $150 million in additional revenue annually.
He also gave the example of an economy car like a Mazda 3, compared to a mid-range car like an Audi A5 and a luxury car like the BMW 735.
The Mazda with an OMV of $18,000 will see no change in the ARF rate. The Audi A5 with an OMV of $45,000 will incur an additional 22 per cent of ARF or $10,000 more, while a luxury model like the BMW will see a 42 per cent increase in ARF payable.
The new ruling will be introduced from the first Certificate of Entitlement (COE) bidding exercise in March.
For more news and analysis on Singapore Budget 2013, click here for ST's Big Story coverage.