Finance Minister Mr Heng Swee Keat announced in Parliament on Monday (Feb 20) that a tiered Additional Registration Fees (ARF) will be introduced for motorcycles.
Here are seven things you need to know about the new system:
1. The rationale
It targets the small but rising number of motorcycle buyers buying expensive bikes, with Open Market Values (OMV) as high as that of small cars.
2. The tiers
There will be three tiers in total, with each increasing value range being subject to a higher level of taxation.
3. The rates
The ARF for motorcycles with OMV up to $5,000 will remain at the current 15 per cent. The next $5,000 will be subject to a rate of 50 per cent, while the remaining value beyond $10,000 will be subject to a rate of 100 per cent.
4. The cars
Such a tiered ARF had been introduced for cars in 2013. It affected 85 per cent of car models sold in Singapore.
5. The likelihood
Based on current registration trends, Mr Heng said over half of new motorcycle buyers will not be affected by the new system.
6. The COE
The Ministry of Transport will cease the contribution of motorcycle COE quota to the open category quota, as very few have been used to register motorcycles, leading to a declining motorcycle population.
7. The implementation
The new tiered system will apply to motorcycles registered with COEs obtained from the second February bidding exercise onwards.