ADDITIONAL REGISTRATION FEE

Mr Cheo Chai Chen asked the Minister for Communications whether he will consider reducing the Additional Registration Fee on cars.

Mr Mah Bow Tan: There is no intention to revise the Additional Registration Fee (ARF) on cars in the near future. Although a reduction in ARF will not affect our control on the vehicle population, it will have implications on the bidding for COEs by buyers of different categories of cars, as well as COE prices.

Unlike COE premiums, ARF is a progressive tax. It is calculated as a percentage of the Open Market Value of a car, which means buyers of more expensive cars pay more ARF. A reduction in ARF would result in more savings for buyers of more expensive cars. Therefore, a reduction in ARF will give buyers of more expensive cars an advantage over buyers of cheaper cars in the bidding of COEs.

A reduction in ARF is likely to lead to an increase in COE prices. Existing vehicle owners will be adversely affected as they have to pay more when they revalidate the COEs of their vehicles.