PARF cuts not expected to significantly affect COE renewals: Jeffrey Siow

SINGAPORE – Cuts to the preferential additional registration fee (PARF) rebate are not expected to have a significant effect on certificate of entitlement (COE) renewal behaviour, said Acting Transport Minister Jeffrey Siow on March 4.

The rebate, which is meant to discourage the use of older, more polluting vehicles, was slashed by 45 percentage points, and the maximum amount that a car owner will receive for deregistering his vehicle early was also halved from $60,000 to $30,000.

Fewer than 2,000 people who have bought cars are estimated to be affected, Mr Siow told the House, with the majority being buyers of higher-end internal combustion engine (ICE) cars.

Responding to Mr Victor Lye (Ang Mo Kio GRC) and Ms Poh Li San (Sembawang West), who asked about the impact of the changes, Mr Siow said the recent changes to the vehicle taxes were implemented with immediate effect, in line with the Government’s general approach to market sensitive tax changes.

This was to avoid bidders rushing to market or distorting the COE market, he added.

The PARF rebate changes were

announced on Feb 12 by Prime Minister Lawrence Wong

during his Budget speech, and took effect after the latest COE exercise closed on Feb 20.

Mr Siow said: “With electric vehicles (EVs) becoming more commonplace, there is now less of a need to encourage early deregistration through the PARF rebate.”

EV purchases were at an

all-time high in 2025

, accounting for about 45 per cent of all new cars sold.

The adoption of EVs was later brought up again by Ms Poh, who asked if the PARF changes reflect the Ministry of Transport’s intention to accelerate the take-up of greener vehicles.

In response, Mr Siow said the adjustments were precisely because adoption of EVs has increased, reiterating that the original objective of the PARF rebates was to encourage the early renewal of vehicles to have a “younger vehicle fleet that is less pollutive”.

Mr Lye asked if the changes to the PARF rebates mark a shift from ownership pricing to usage pricing, and if so, whether the ministry would provide a rough road map so Singaporeans can make more informed transport decisions.

A balance of ownership and usage controls will always be necessary, replied Mr Siow, adding that these are important to keep road congestion in check.

Currently, the

Electronic Road Pricing

2.0 system

makes use of satellite technology to determine a vehicle’s location for toll charging, and Mr Siow said it makes targeting road congestion more precise and could possibly translate to more efficient road usage.

“Depending on the outcomes, potentially we can then adjust our ownership policies and our vehicle quotas accordingly,” he said.