Further Reduction in Special Tax and Other Offset Measures for Owners of Diesel Vehicles

News Releases 18 Feb 2019 diesel vehicles road tax rebate special tax Budget Statement

     As announced by the Minister for Finance, Mr Heng Swee Keat, in the 2019 Budget Statement, the excise duty on diesel fuel will be increased from $0.10 per litre to $0.20 per litre with effect from 18 February 2019, to encourage users to reduce diesel consumption. To cushion the impact of the increased diesel duty, the annual Special Tax levied on diesel cars and taxis will be reduced permanently. New road tax rebates will be provided over the next three years for diesel buses and goods vehicles, with additional cash rebates for owners of diesel school buses and eligible private hire or excursion buses used to ferry school children.

Further Reduction of Special Tax for Diesel Cars and Taxis

2.   Currently, a Special Tax is levied on diesel cars and taxis annually. With the introduction of the volumetric diesel duty at Budget 2017, the annual Special Tax for diesel cars and taxis was permanently reduced by $100 and $850 respectively with effect from 20 February 2017. With the increased diesel duty, the annual Special Tax for diesel cars and taxis will be further reduced permanently by $100 and $850 respectively with effect from 18 February 2019. The Land Transport Authority (LTA) has strongly encouraged taxi companies to pass on the full cost savings from the Special Tax reduction to their taxi drivers.

3.   As time is needed to effect the necessary system changes to implement this Special Tax reduction, vehicle owners will continue to receive their road tax payment notice (including the Special Tax payable) based on the existing rates until end-June 2019.

4.   For owners paying the Special Tax based on the existing rates until end-June 2019, as well as those who have already paid the Special Tax for the period beyond 18 February 2019, the excess Special Tax paid will be automatically used to offset the amount payable at the next road tax renewal. If the vehicle is transferred to another owner before its next road tax renewal, any excess Special Tax paid will be offset against the transfer fee payable, and any remaining excess Special Tax paid will accrue to the new registered owner.

New Road Tax Rebates for Diesel Buses and Goods Vehicles

5.   Owners of diesel buses and goods vehicles (except omni-buses under LTA’s contracts for public bus services) will be granted new road tax rebates for a three-year period from 1 August 2019 to 31 July 2022. A 100 per cent road tax rebate will be granted in the first year, followed by 75 per cent in the second year, and 50 per cent in the third year. The new road tax rebate of 100 per cent will apply for the period from 1 August 2019 to 31 July 2020[1]. The revised road tax rates are shown in Annex A.

6.   These new road tax rebates will not apply to public bus services operating under LTA’s contracts. Separate arrangements will be made with these bus operators under the provisions of the contracts.

7.   Diesel buses and goods vehicles will need to meet all the existing requirements for road tax renewal in order to receive the new road tax rebates. These include having valid motor insurance and passing vehicle inspections, where applicable.

8.   For diesel bus and goods vehicle owners who have paid the road tax for the period beyond 1 August 2019, the excess road tax paid will be automatically used to offset the amount payable at the next renewal. If the vehicle is transferred before its next road tax renewal, the excess road tax paid will be offset against the transfer fee payable, and any remaining excess road tax paid will accrue to the new registered owner.

New Additional Cash Rebates for Diesel Buses Ferrying School Children

9.   Diesel school buses, and eligible diesel private hire or excursion buses used to ferry school children will receive new additional cash rebates shown in Annex B during the qualifying period from 1 August 2019 to 31 July 2022. The additional cash rebate for the period from 1 August 2019 to 31 July 2020 will be $1,600 for school buses, and up to $1,800[2] for eligible diesel private hire or excursion buses[3].

10.  Diesel school buses which are registered with LTA will automatically receive the cash rebates on 1 August and 1 February during the qualifying period from 1 August 2019 to 31 July 2022.

11.  Eligible diesel private hire or excursion buses used to ferry school children can continue to apply to LTA to enjoy a further 50 per cent rebate off the road tax rates shown in Annex A
[4]. They are not required to apply separately for the new additional cash rebates, as these will be automatically processed with their application to LTA for the 50 per cent rebate.

Annex A: Road tax for diesel buses and goods vehicles from 1 Aug 19 to 31 Jul 22
Annex B: Additional cash rebates for diesel buses ferrying school children


[1] This is higher than, and entirely replaces, the road tax rebate of 25 per cent which had earlier been announced at Budget 2017 for the period from 1 August 2019 to 31 July 2020.

[2] This is higher than, and entirely replaces, the cash rebates which had earlier been announced at Budget 2017, which was up to $350 for diesel school buses, and up to $450 for eligible diesel private hire or excursion buses used to ferry school children for the period from 1 August 2019 to 31 July 2020.

[3] To be eligible for the cash grants, the diesel private hire or excursion buses must have ferried students continuously for at least six months during the qualifying period. The cash grants will be pro-rated based on the number of days these buses have ferried students during the qualifying period.

[4] The application form for the 50 per cent rebate can be found at: https://www.onemotoring.com.sg/content/onemotoring/home/driving/bus.html

 

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