We refer to Mr Dave Yap’s letter “Why does road tax for van rise upon renewal of COE” (TODAY, 24 Jan 2015).

A road tax surcharge is payable for all vehicles older than 10 years. This is to encourage timely deregistration of the vehicle as older vehicles are likely to be more pollutive and prone to frequent breakdowns, thus causing inconvenience to other road users.

The surcharge increases by 10 per cent of the basic road tax per annum, and is capped at 50 per cent per annum.

The average annual mileage of goods vehicles of 40,000km is more than twice the 18,000km for cars. Due to the heavier usage, goods vehicles are inspected more frequently than cars – yearly in the first 10 years and half yearly thereafter, to ensure owners continue to maintain their vehicles in roadworthy condition. The age of the vehicle is used to determine the frequency of inspections as it is a good proxy for the condition of the vehicle and its components. Nonetheless, we do review the inspection regime regularly and we take evolving trends into account.

To ease the cost of replacing their older vehicles, owners of eligible commercial vehicles can use the Early Turnover Scheme (ETS).  Under the ETS, owners can transfer the remaining COE period from the existing vehicle to the replacement vehicle and enjoy a bonus COE period proportional to the vehicle’s remaining statutory lifespan. This allows owners to register a new commercial vehicle at a cost lower than the prevailing quota premium.

We thank Mr Yap for his feedback.
 

Helen Lim (Ms)
Director, Media Relations
Land Transport Authority