TAXI DIESEL TAX AND PETROL AD-VALOREM TAX (Review)

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TAXI DIESEL TAX AND PETROL AD-VALOREM TAX:

(Review): The following Question stood in the name of Mr Yeo Guat Kwang -

5. To askthe Prime Minister and Minister for Finance in view of the potential further increases in oil price, will the Ministry review the rate of taxi diesel tax and the petrol ad-valorem tax, to ease the adverse impact of escalating oil price on cost of living and business cost.

Mdm Halimah Yacob: Question No. 5, Sir.

The Minister of State for Finance (Mrs Lim Hwee Hua) (for the Prime Minister and Minister for Finance): Sir, there are no plans at present to review the diesel and petrol taxes.Singaporeimports all the oil that we consume. Therefore, we have to take price signals from the world rather than insulate ourselves from price changes. Consumers should adjust their behaviour in accordance with the changing prices.

On petrol duty, I would like to clarify that in February 2003, we changed the system of taxation of petrol,replacing the ad valorem tax with a fixed rate of petrol duty per litre of petrol. The tax payable under this fixed rate is lower than what it would have been under the ad valorem tax, given today's high petrol prices.

Sir, taxis pay a fixed special tax per year. This approximately compensates for the absence of a tax on diesel equivalent to the petrol tax. We should keep the quantum of this special tax in line with the petrol tax, and only adjust the two together.

Commercial and public transportation vehicles are not subject to any fuel tax.