ROAD TAX (Reduction)

Mr Imram bin Mohamed asked the Minister for Communications whether road tax will be reduced with the introduction of the electronic road pricing system.

Mr Mah Bow Tan: Mr Speaker, Sir, the Electronic Road Pricing (ERP) system will allow the Government greater flexibility to deal with congestion at different times and different places, and to price road usage more equitably to maintain acceptable traffic conditions. If the ERP system succeeds in changing the travelling habits of motorists and influencing them to use their vehicles sparingly, the Government will have greater scope to release more COEs, while at the same time keeping our roads relatively free-flowing.

With ERP in place, we will shift our vehicle taxes more towards a usage-based tax. The vehicle tax structure will be rationalised to strike a judicious balance among the various costs, including one-time ownership costs like COE and ARF, annual operating costs like road tax, and usage costs like ERP charges.