Singapore’s Budget 2023: Higher Additional Registration Fees for Top-Tier Luxury Cars
Singapore’s Finance Minister, Lawrence Wong, recently announced in his Budget 2023 speech on February 14 that higher-end luxury car buyer will soon face increased taxes through additional registration fees (ARF). The changes aim to differentiate between tiers of luxury vehicles, specifically targeting the top one-third of cars by open market value (OMV).
Exemption for Lower-Tiered Vehicles
Wong assures that buyers of cars with an OMV of $40,000 or less will not be affected by the change. However, buyers of cars with an OMV of more than $40,000 and up to $60,000 will have to pay higher ARF rates of 190% of the OMV.
Tiers of ARF
The ARF tiers vary depending on the OMV of the car. For cars with an OMV of up to $20,000, buyers will pay an ARF of 100%. For every additional $20,000 in OMV, the ARF rate increases to 140%, 190%, 250%, and 320% respectively.
Implementation of Higher Fees
The increased fees will begin from the second Certificate of Entitlement (COE) bidding in February, which is scheduled for February 22. The change in the ARF system is expected to generate approximately $200 million in additional revenue per year, although the actual amount will depend on the state of the vehicle market.
Preferential ARF Rebates Capped at $60,000
Currently, preferential ARF rebates are calculated as a percentage of the payable ARF. Wong has announced that he will cap preferential ARF rebates at $60,000 to avoid excessive rebates provided to more expensive cars when they are deregistered.
Conclusion
The increase in ARF rates for higher-end luxury cars is part of Singapore’s efforts to reduce its carbon footprint by promoting the use of public transport and reducing private vehicle ownership. The change will also help to generate additional revenue for the government. Despite the additional fees, Singapore remains a popular destination for luxury car buyers due to its high standards of living, strong economy, and attractive tax policies.