COE tender postponement sparks speculation of big car tax changes

The Land Transport Authority (LTA) announced on Friday that the next Certificate of Entitlement (COE) tender will be delayed for two days, triggering speculation that major changes affecting car buyers are afoot. The LTA said bidding will begin next Wednesday and end on Friday, instead of the usual Monday to Wednesday exercise period.

Motor traders expect announcements to be made next Monday on Budget day to have an impact on prices. "There must be some structural changes coming," said a veteran motor trader who declined to be named. "Otherwise, they won't need to postpone bidding."

There is also talk that the government will lower the annual vehicle population growth rate further. It is now 0.25 percent, and the possibility of zero growth has been raised before by Senior Minister of State, Josephine Teo.

The other widely expected change is to the Carbon Emissions-based Vehicle Scheme. As first reported by The Straits Times, the government is looking to inject more criteria into the scheme, which dishes out tax rebates and surcharges according to how much carbon dioxide a car emits. New pollutants being looked into are hydrocarbons, fine particulate matter, carbon monoxide and nitrogen oxides.

And with recently announced rules for private-hire cars, there is also talk the government might bar private-hire operators from bidding directly for COEs. Private-hire players such as Uber and Grab have been blamed for pushing COE prices up in the last two years when they started buying new cars to grow their fleets. Taxi companies are barred from bidding. Instead they pay a prevailing quota premium for new cabs.

Lastly, some traders expect the power cap for Category A COE (cars up to 1,600cc and 130bhp) to be lowered to 120bhp. Traders said buyers trying to beat the changes - which are likely to push prices higher - might cause a frenzied rush to showrooms this weekend.