Revenue from certificates of entitlement (COEs) and vehicle registration taxes for the financial year ended March 31, 2019, will shrink by $1.1 billion to among its lowest levels in recent years.

According to the Budget statement, Singapore's operating revenue for the year has been revised 0.2 per cent lower to $74.7 billion.

The decrease was partly because of lower-than-expected collections from motor vehicle taxes and vehicle quota premiums.

Motor vehicle tax collections are estimated to be $2.5 billion - $0.6 billion, or 20.5 per cent, lower than the budgeted estimate.

This was because of fewer-than-projected registrations, which dragged down Additional Registration Fee collection, the main car tax.

On top of that, more cars qualified for tax breaks under the Vehicular Emissions Scheme (VES), which metes out rebates and surcharges based on a car's emission levels.

Revenue from COE was estimated at $2.9 billion - $0.5 billion, or 15.1 per cent, lower than the budgeted estimate. This was mainly because of a smaller-than-projected COE quota.

The COE supply has been shrinking because of the cyclical nature of the quota system, as well as more motorists deciding to hold on to their cars beyond 10 years.

In comparison, the actual FY2018 revenue from COEs was $3.62 billion, while reve-nue from vehicle taxes was $2.62 billion.

In FY2016, revenue from COEs was $6.55 billion, while revenue from vehicle taxes came up to $2.15 billion.

Looking ahead, the COE revenue collection for FY2020 is projected to shrink further to $2.64 billion, while revenue from vehicle taxes is expected to fall to $2.27 billion.

The expenditure for transport for FY2020 is expected to increase by $0.7 billion, or 7.1 per cent, fuelled by MRT projects.

Christopher Tan