15 percent road tax cut to go into effect, 1st July

If you recall, the government announced changes to the tax structure of vehicles on the 30th of January 2008 and 15 Feb 2008. This, in an effort to charge motorists with vehicle ownership costs based more on actual usage in order to manage congestion on roads.

With effect from 1st July, road tax for cars, motorcycles, taxis and commercial vehicles will be reduced by 15%. In addition, the road tax structure for electric and hybrid cars will also be revised.

The annual "special" tax for Euro-IV diesel cars will be revised from the current computation of four times of the road tax to $1.25 per cubic centimetre (cc) of engine capacity, subject to a minimum annual payment of $1,250.

The revision to special tax structure for Euro-IV diesel cars is made in recognition of the improved emissions of Euro-IV diesel cars with respect to emissions of particulate matter, carbon dioxide, and fuel efficiency of diesel engines. It also seeks to narrow the difference in the cost of fuel consumption between a Euro-IV diesel car and a petrol car.

From the 9th of June 2008, the LTA will indicate the revised road tax/special tax rates (payment for special tax is made together with the road tax) on the road tax renewal notices or GIRO payment schedules issued. LTA's e-service portal, www.onemotoring.com.sg which operates from between 6am and midnight daily, will also henceforth reflect the new rates.

Vehicle owners who have received notices or GIRO payment schedules from LTA prior to 9th June 2008, but renew their road tax/special tax on or after 9 June 2008, will pay based on the revised rates for the licensing period from 1 July 2008.

Those who have received their road tax renewal notices or GIRO payment schedules with the higher road tax/special tax rates indicated may refer to the abovementioned portal to find out the new rates. They need not request for a new renewal notice or GIRO payment schedule.

Excess Road Tax/Special Tax Paid

There would be a number of vehicle owners who would have paid their vehicle road tax and special tax (if applicable) before 9 June 2008 based on the current tax rates for the period commencing 1 July 2008. In such cases, the excess amount paid would be indicated on the vehicle owner's next road tax renewal notice, and would be automatically offset from the next road tax/special tax payable.

If the vehicle is transferred before its next road tax renewal, any excess road tax/special tax paid will be used to offset the total transfer fees payable. Any remaining road tax/special tax, including any excess road tax/special tax paid, will be transferred along with the vehicle to the new registered owner.

If the vehicle is de-registered, any remaining unused portion of the road tax/special tax and excess road tax/special tax paid will be automatically refunded to the last registered owner of the vehicle.